Cattle Market Reports and Analysis

Buckle Up: Here's Why Cattle Prices Are Setting Up for Another Wild Ride in 2025

Mon, 10 Feb 2025 14:13:42 GMT

The cattle markets hit historic highs again to start 2025, and as USDA’s latest Cattle Inventory report showed U.S. beef cattle inventory fell to the lowest level in 64 years , tight supplies and strong demand could push cattle prices to even higher highs in 2025.

USDA’s annual Cattle Inventory Report released Friday shows the U.S. total cattle inventory shrunk another 1% over the past year, with the number of beef cows also down 1%.

Those numbers, along with questions around just how much higher these markets can go, were major topics surrounding the 2025 CattleCon in San Antonio, Texas, (the annual cattle industry convention) this past week.

Signs of a Slowdown?
Economists and market analysts knew the cattle herd was still shrinking, even before the report was released last week. But economists say there are some signs starting to signal that is slowing down.

“We certainly got smaller in 2024. That was actually kind of obvious about a year ago when you looked at heifer numbers,” said Derrell Peel, Oklahoma State University Extension livestock specialist. “If you look at the heifer numbers in this report, we don’t have a lot. And so we’re going to be challenged going forward to stop this liquidation. I think we might stabilize numbers this year, but I think growth is pretty much a long shot at this point.”

“I think we’re getting close to the bottom, as Darrell referenced,” said Don Close, senior animal protein analyst for Terrain, during the U.S. Farm Report live taping at NCBA’s annual convention. “I think the challenge is retaining enough heifers out of the supply that we have to provide the fuel for the build back.”

Calf Crop Was a Big Surprise
Casey Mabry, with Blue Reef Agri-Marketing, said there actually was a surprise in the latest cattle inventory report, and that wasn’t with heifer numbers.

“The biggest surprise to me was really looking at the total calf crop report, because we’re looking at the total cow inventory numbers. I think that probably caught some people off guard, having the calf crop a little bit bigger than what most people’s expectations were,” said Mabry.

Incentives Drive Outcome
With cash cattle hitting records to start 2025 a question on almost everyone’s mind is, can it continue? Mabry said it really depends on if demand can remain steady, since the supply side will remain tight.

“Incentives drive outcome and obviously with grain prices as cheap as they’ve been, and cattle prices as high as they’ve been, we’ve held on to some cattle. So it’s kept the front end of the market really, really tight and it’s kept packers chasing after cattle. So that ran the market $10 or $15 higher, in my opinion, than what we should have on the front end,” said Mabry. “So, it’s going to be really interesting to watch as we go through the back end of this thing. We’ve probably got to work through some stuff right here on the front end. But if the analysts continue to say we’re going to be tighter and demand stays pretty good, we’ll probably see prices exceed where we were before.”

“We’re Still Bullish”
Peel reminds producers there’s a great deal of risk in these markets. He said the markets don’t like uncertainty. With trade concerns and tariff threats, combined with a strong U.S. dollar, the combination is throwing uncertainty into the market.

“We’re very bullish and still bullish in general going forward for average prices,” said Peel. “But we also know that we’re subject to a lot of shocks right now. We’ve seen a couple already. We’re certainly vulnerable. There’s a lot of air below us since this market is so high. So producers really need to still do that risk management. Producers need to think about those marketing windows. If you got caught in a shock in one of those, it could really be devastating to you.”

Close has similar advice. He said with the development of insurance products, plus futures and options contracting, there are several ways for producers to manage risk today.

“At the price level we’re at, and just any measured retracement in the market, it could take you out of the game. At these price levels, it is absolutely imperative to have some kind of price risk management program in place,” said Close.

“I think you just need to run with what I call a keen sense of paranoia,” said Mabry. “I mean, be bullish, be excited about the market, but don’t get overly euphoric. We’ve got to remember back a short three or four years ago, we were all in the doldrums and very scared. And there’s a lot of people that were telling their kids to get into a different business. And now all of a sudden, we’re all jumping on the bandwagon of cattle and getting excited about this. So, we want to make sure that you guys are running your businesses like businesses and not gambling on cattle.”

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Are More Record Cattle Prices Ahead in 2025?

What Four Questions Will Cattle Market Need to Answer in 2025?

Wed, 08 Jan 2025 20:29:13 GMT

Trends are always difficult to ascertain coming out of holiday periods as many markets are closed and volumes tend to be pretty light, but cattle prices have started 2025 very strong. While questions exist on the demand side, tight cattle supplies will remain the primary driver in the new year and should continue to support prices. And as always, weather will have a significant impact on feed and forage availability and cattle marketing patterns. As I write this article in early January, I want to discuss four questions that I think will be important for the 2025 cattle market to answer.

Will we start to see significant heifer retention?
This question has been circulating for the better part of the last two years. There are a lot of reasons why retention has been delayed including weather, production costs and interest rates. But market conditions should be very favorable again and I do think heifer retention could be seen in 2025 if weather cooperates. When heifer retention does pick up, it will further tighten supplies of cattle as those females are held out of the marketing system. This will be the first stage of growing this cowherd, which is currently at a 60+ year low.

Can slaughter weights keep increasing?
Most analysts are forecasting beef production to be lower in 2025. These forecasts are based on continued decreases in cattle numbers and the potential for decreased female harvest in response to high prices. In truth, I could have written this exact same thing last year. But with cattle supplies tight, beef prices high, and feed prices relatively low, cattle were fed longer and to heavier weights. This increase in pounds largely offset the decrease in female slaughter and resulted in steady beef production levels for 2024. I will readily admit that I don’t know how much further weights can be pushed, if at all, but those same factors are largely at play again this year. So, I will be watching harvest weight trends very closely.

Will we see greater than expected growth in pork and poultry production?
Holding everything else constant, lower feed prices increase returns across all livestock species and lead to greater production levels. And production levels of competing meats do impact beef and cattle prices. Recent increases in pork production have been driven almost entirely by productivity, rather than increases in breeding inventory, and increases in broiler production have been running close to the long run trend. I just point this out because production increases can occur much faster in the hog sector than the cattle sector, and faster still in the poultry sector. While there aren’t many indications of expansion in other species currently, this was a factor in 2015, and I think it bears watching in 2025. It is important to remember that beef supplies are not the only factor that impacts beef prices. All proteins compete in the meat case.

What will be the impact of any changes in trade policy?
Trade has been a major topic of discussion recently and I doubt that will change in 2025. Beef exports have been lower in recent years due to tight domestic supplies and high prices, but the U.S. still exported the equivalent of roughly 11% of production last year. In the past, retaliatory tariffs have impacted beef and cattle prices, so it bears watching going forward. It is also important to remember that the nature of beef trade very much depends on the trading partner. For example, we export a lot of beef to Mexico and Canada, but we are also a significant import market for those two countries. And while trade discussions typically focus on beef, a significant number of live cattle enter the U.S. from Mexico and Canada each year. Conversely, over half of U.S. beef exports go to Japan, South Korea and China, but those are almost exclusively export markets. The complexity of each of these trading relationships makes discussion of trade impacts very complex and something that will be interesting to follow this year.

This article was shared by S outhern Ag Today . Kenny Burdine is a University of Kentucky Extension Professor of Agricultural Economics and Livestock Specialist.

Read more: USMEF Looks At Red Meat Trade Opportunities With Mexico, Canada and the United Kingdom

Mexican Border is Expected to Open for Feeder Cattle Week of Jan. 20, Sources Say

Five-State Beef Conference Dates and Locations Set for 2024

Thu, 12 Sep 2024 15:42:42 GMT

Beef Extension teams of Oklahoma, Kansas, Colorado, New Mexico, and Texas will be hosting the upcoming Five-State Beef Conference Sept. 30 and Oct. 1. The annual conferences cover topics important to beef cattle producers with locations rotating among the states each year.

This year the meeting series will kick off at the Cimarron County Fair Building in Boise City, Okla. on Monday, Sept 30. For more information about registering for the Boise City meeting, contact Kierra Ortega (Cimarron County Ag Educatory) at 580-544-3399 or Britt Hicks (OSU Panhandle Area Livestock Specialist) at 580-338-7300.

The meeting will also be held at the Coldwater Veteran’s Building/City Building (239 East Main) in Coldwater, Kan. on Tuesday, Oct. 1. For more information about registering for this location, contact Levi Miller (Camanche County Kansas Ag Educator) at 620-582-2411 or Britt Hicks (OSU Panhandle Area Livestock Specialist) at 580-338-7300.

Program agenda includes:

Market Update from Glynn Tonsor, Kansas State University,
Dairy x Beef: Understanding Feedlot Performance and Carcass Characteristics by Casey Maxwell, Cactus Feeders
Optimizing Forage Efficiency: Enhancing Reproductive Performance & Development in Cattle, Emma Briggs, Kansas State University
Building Your Beef Herd: How Trace Minerals Can Improve Profitability by Ddee Haynes, Axiota Animal Health
Research Updates from Justin Waggoner, Kansas State University, Paul Beck, Oklahoma State University, Glenn Duff, New Mexico State University, Corey Moffet, USDA/ARS Southern Plains Range Research Station

Registration starts at 1:30 p.m. and the program ending at 7 p.m. with a beef dinner at each location. There is a registration fee of $20 with a preregistration deadline of Sept. 23.

Money On The Table: Top 9 Factors That Influence Cattle Price on Sale Day

Mon, 23 Oct 2023 14:37:59 GMT

For cow-calf producers, fall is often a time for preconditioning, weaning and marketing calves. While this year’s prices will likely be towards the top end compared to previous years, could you be leaving money on the table?

South Dakota State University Extension researchers have been monitoring sale barn prices and categorizing lots of cattle in the Northern Plains to see how variables effect the overall check at the end of the day, says a recent SDSU article .

Here’s a list of the nine most influential variables when it comes to receiving the best price for your cattle.

The Sale Barn

Using backgrounded calf data from 2022, it was determined that the sale barn itself can have an impact on prices received at the market. This is likely due to the volume of cattle.

SDSU noted that “high-volume” sale barns received higher prices, while barns considered “low-volume” sold animals at discounts ranging from $5.43 to $19.31 per cwt.

While price discounts may be cause for pause, there are other factors to also consider before making the decision to market cattle at a different barn. Consider other expenses, such as milage differences, marketing expenses and other fees to determine if a change in location would ultimately lead to a change in profit.

Steers Vs. Heifers Vs. Bulls

Consistent with other studies, yearling steers brought a premium compared to similar heifers and intact bulls, which were discounted $13.34 per cwt. and $7.26 per cwt. respectively.

From a management perspective, it may be worth evaluating the use of sexed semen, especially in an operation already implementing artificial insemination breeding practices. Additionally, producers may want to evaluate the cost and effort of different castration methods to reduce the number of bulls, SDSU explains.

Hide Color

The researchers found that similar fall calves and backgrounded calves of any single color brought premiums over mixed lots of cattle—encouraging producers to market cattle in consolidated lots of a single color to avoid discount.

Specifically, lots of black-hided, black-faced cattle received top dollar. The other observations are listed as discounts (on average) relative to the price of these all-black lots.

Red-hided, red-faced cattle were discounted $8.37 per cwt., while white cattle received a $13.95 cwt. discount.

Compared to the all-black counterparts, mixing hide colors led to discounts of $8.83 to $20.74 per cwt. Specifically, cattle with spots, roan, white feet or tails, tiger-stripes and other non-solid color patterns were heavily discounted, as much as $36.85 per cwt.

Animal hide color is often a point where a producer’s breed preference collides with the perceived market-endpoint preference, SDSU notes. While the object of the study is not to influence breed selection, there may be value in evaluating breeding decisions that will provide the most profitable outcome for the operation.

Lot Size

Answering the question—do larger lots really bring a premium? Not necessarily.

In the study, lots were divided into 4 groups: 1 to 20, 21-50, 51 to 100 and 101-plus--assuming the sale barn staff had already separated cattle for uniformity, such as frame size, muscling and body condition.

Overall, cattle in lots of less than 20 were discounted $7.82 per cwt. compared to lots of 21 to 50 head. However, this was the only significant difference, notes SDSU, with larger lots of cattle receiving no additional premiums.

Lot Uniformity

SDSU found that lot uniformity, such as muscle, flesh and height, was very consistent across all barns as outliers in the herd had been pre-sorted before entering the sale ring. The sort provides buyers with the ability to fill orders and needs. Unfortunately, though, it may lead to a group of less than 20 head for the producer, which will likely receive a discount in the ring.

Horns

Discounted $24.63 per cwt., horned cattle take a large hit compared to their hornless counterparts. SDSU researches note this indicates buyers are unwilling to take on the inherent risk to other animals, carcass damage or lost of gain when purchasing horned animals.

Creep Feeding

The study found purchasers were willing to spend an additional $12.93 per cwt. on cattle not offered creep. Producers should evaluate the value of creep feed compared to the total gain and reduced price per cwt. received to determine if feeding creep is cost effective.

Implants

Non-implanted calves brought $7.38 per cwt more than their implanted counterparts. Similar to creep feeding, the cost of implants and increased weaning weights should be considered against the price difference received for non-implanted cattle, SDSU notes.

Vaccination Status

Herd health protocols also play a role in prices received, SDSU found, after evaluating the use of 5-way and 7-way vaccines.

Cattle that received a 5-way vaccine brought $14.59 per cwt. more than unvaccinated cattle, while those receiving a 7-way vaccine were paid $12.19 per cwt more. Additionally, cattle with unknown vaccination status were discounted $22.52 per cwt., and cattle with an unknown 7-way status were penalized $12.42 per cwt.

This data indicates that producers who follow a vaccination protocol and provide a list of dates and vaccinations on sale day are compensated for their efforts, SDSU says.

Read More: Cattle Auction Preparations: A Sale Day Checklist for Ranchers

Meanwhile, producers marketing cattle in a specific program that limits vaccines should ensure appropriate buyers are present and informed to minimize potential discounts.

At the end of the day, understanding production costs and market trends is increasingly important.

Additionally, SDSU notes that understanding these variables discussed will increase competitiveness and flexibility for producers marketing cattle in 2023 and beyond.

Rebuilding the Herd: Experts Explain the Here and Now

Thu, 12 Oct 2023 17:10:14 GMT

For cattle producers across the U.S., a number of factors make the idea of herd rebuilding a bit less enticing.

According to USDA data, there’s nothing suggesting that cattle producers are in the process of rebuilding U.S. cattle herds, reports Michelle Rook on AgDay.

Whether it be high cattle prices or inflationary pressures, several factors are tipping the scales for producers to hold off expansion.

Feeder steer and heifer prices at some auction barns are up by over 55%, reports Clinton Griffiths, host of AgDay. Higher prices at the sale barn, helping pay off debt or restore equity drained by drought and high input costs , might be reason for some producers to continue delaying heifer retention.

Additionally, persistent drought has made it difficult to stabilize or rebuild the herd, notes Derrell Peel, livestock marketing specialist with Oklahoma State University Extension.

“As of early October, 40 percent of the U.S. is in some stage of drought with 23 percent in D2 (Severe) to D4 (Exceptional) drought. This includes regions where significant numbers of beef cows are located,” he explains.

With incentivized selling and many parts of cattle country still struggling with drought conditions, the idea of retaining heifers might be kicked further down the road.

In the latest cattle on feed report, placements were down 5% from 2022. However, placements of heifers versus steers are still running higher than normal, Rook reports.

“The last actual data we had was in July. The quarterly data showed at that point in time we had right at 40% of all the feedlot inventories were heifers. That’s a level that goes all the way back to 2001, since it’s been that high of a proportion,” Peel explains.

Meanwhile, inflationary pressures, such as high interest rates, will likely cause producers to move more slowly and cautiously before jumping into heavy heifer retention, says Scott Varilek, broker with Kooima Kooima Varilek Trading Inc.

“With the interest rates staying higher and going to stay higher out into the future, there’s got to be some serious incentive and some serious confidence that this market can stay at a high level,” Varilek adds. “If you’re looking to expand in the beef industry, it is going to take a large dollar amount and you’re going to have a lot of risk.”

The process of rebuilding the cattle herd also takes considerable time, Rook notes, and it looks like it’s being pushed off until 2024.

Read More:

The Herd Rebuilding Challenge

Is A Recession Imminent? Here Are The Red Flags Ag Economists Are Now Watching

Profit Tracker: Feedings Costs 25% Higher YOY

Fri, 07 Jul 2023 19:15:38 GMT

The average cost of feeding a steer to finish weight was 25% higher for cattle marketed last week and is projected to be 31% higher for cattle placed on feed last week at roughly $600 per head, according to the Sterling Beef Profit Tracker .

For the week ending August 27, cattle feeders saw average profits of $138 per head as the 5-area fed steer price averaged $145.61 per cwt. That price was 15% higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Estimated beef packer margins for the week ending August 27 were $126 per head, down $24 per head from the previous week and down 89% from estimated margins a year ago that exceeded $1,100 per head. Last week’s Choice beef cutout averaged $259.45 per cwt., about $1 lower than the previous week and down $83 per cwt. (24%) from the same week a year ago.

Feed costs for the cattle marketed last week averaged $561 per head, down $14 from the previous week but up $121 per head from last year. The estimated total cost for finishing a steer last week was $1,900 per head, up 16% from last year’s estimate of $1,644 per head.

Cattle slaughter totaled an estimated 678,000 up 26,000 head (4%) from the same week last year. Packing plant capacity utilization was estimated at 92.5% compared to 90.2% the previous week and 88.7% last year.

Farrow-to-finish hog producers found profits of $75 per head last week, down $10 per head from the previous week but up $28 per head (58%) from last year. Lean carcass prices averaged $127.15 per cwt., down $3 per cwt. from the previous week but up $26 from last year (26%).

Pork packers saw losses of an estimated $51 per head, which is steady with the previous week but $68 per head less than the $16 profit per head from last year. Hog slaughter was estimated at 2.393 million head, down 2,000 head from the previous week and down 38,000 head (2%) from last year.

Pork packer capacity utilization was estimated at 88.8% compared to 88.9% the previous week and 90.4% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)