Category: Livestock Marketing

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 US still exported the equivalent of roughly 11 percent 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 US from Mexico and Canada each year. Conversely, over half of US 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.

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Burdine, Kenny. “Four Questions the 2025 Cattle Market Will Need to Answer.” Southern Ag Today 5(2.2). January 7, 2025. Permalink

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In 2024, cattle markets remained strong, driven by declining cattle numbers—a trend consistent with expectations outlined at the start of the year. The ongoing cattle cycle began in 2014 and saw beef cow inventories peak in 2019 at 31.69 million head. Since then, inventories have declined at an annual rate of 2.3%. 

Cattle and calf prices continue their upward trajectory, ending the year on a high note. In the Southern Plains, prices for 500-600 pound steers have increased by approximately $40 per CWT from early October to mid-December. Contributing factors include recent rainfall in the region and a reduced number of calves, which have collectively helped to elevate calf prices. Additionally, the current import restrictions on feeder cattle from Mexico are likely providing some further support to prices, given that December is typically a peak month for imports. 

We also have a strong fed cattle market to finish the year.  Fed steer prices in the Southern Plains reached $195 in mid-December. Carcass weights remain very high compared to history. Steer dressed weights are near 960 pounds. Lower corn prices are supporting longer feeding periods, but there are typically seasonal declines in fed weights. It will be very interesting to watch cattle weights as 2025 begins.

2025 will begin as another year on the heels of herd contraction in the previous year. The USDA’s January 2025 Cattle Inventory Report is expected to confirm that cattle numbers did indeed decline in 2024. Weekly slaughter data from USDA support this projection. Year-to-date beef cow slaughter is down by 18%, but the implied cull rate—calculated as slaughter divided by inventories—remains at 10.2% for 2024, well above the that would indicate herd expansion. Heifer slaughter data also shows no signs of herd expansion. Year-to-date heifer slaughter is down 1.1%, with no evidence of heifer retention occurring at a rate sufficient to signal herd rebuilding.

Cattle market fundamentals at the close of 2024 offer plenty of bullish signals for 2025. Many producers remember the high prices in 2014-2015 as a cautionary tale of how quickly prices can come down after a run up. However, the current fundamentals are quite different than they were in 2015. By year two of the 2014-2015 high price environment, it was clear that herd expansion was occurring. Currently, there are no clear signs to suggest larger calf supplies anytime soon. While prices are high, they have not yet hit levels to persuade producers to expand. 2024 prices hit record levels as shown in the chart above. However, after adjusting for inflation using 2000 as the base year, the purchasing power from the 2024 producer revenues was still below 2014-2015. It could very well be that feeder cattle prices have not yet peaked and the market is beginning 2025 with more optimism. 

Happy New Year!

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Maples, Josh, and James Mitchell. “2024 Beef Cattle Market Review.” Southern Ag Today 4(53.2). December 31, 2024. Permalink

By Christmas Eve you probably have your Christmas dinner plans already made.  This article looks at wholesale meat prices for some popular celebration cuts.  Wholesale prices are used due to a lack of retail prices for many cuts.  These prices give a good fundamental look at meat prices even though a grocery store customer might have scored a deal through weekly features at their store.

Beef

Prime rib, a standing rib roast, or ribeyes are a great holiday dinner.  Ribeye prices increased, as usual, in the runup to Christmas.  Prices normally increase this time of the year as demand picks up for these cuts for holiday dinners.  Prices increased more than seasonally this year compared to prices last year or a 5-year average.  Wholesale, boneless, ribeyes hit $15.61 per pound before dropping to $12.00 per pound in mid-December after holiday buying hit its peak.  Strength in the primal rib value boosted boxed beef cutout values which spilled over into higher fed cattle prices late in the year.

Pork

Hams jumped higher while pork loins languished late in the year.  Wholesale 23-27 pound hams increased to $1.09 per pound by mid-December, well above last year’s $0.76 per pound.  That was not the high price for the year as the peak occurred in mid-year, as is often the case with pork due to normally reduced supplies during summer.  Pork loins were $0.94 cents per pound compared to $1.01 last year.  Hams, bellies, and ribs prices have boosted the pork cutout values.  If pork tamales are included in your holiday fare, pork butts have helped.  Pork butt primal values have been lower than last year through most of the Fall.  

Lamb

Wholesale rack of lamb prices have been about the same as a year ago, $11.44 per pound, in recent weeks. Light racks have been a little higher than last year while medium racks have been a little cheaper than the year before.  Loin prices have been about equal to a year ago throughout the Fall.  

Turkey

Wholesale 8-16 pound hen prices jumped higher after Thanksgiving.  They hit $1.04 per pound in mid-December compared to $0.86 per pound a year ago.  Prices remain well below the 5-year average.  Continued turkey losses from HPAI and the financial hit from low prices will likely continue to cut supplies and move prices higher in the new year.

Whatever your holiday dinner choice, Merry Christmas and Happy New Year from all the Southern Ag Today livestock economists!

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Anderson, David. “Christmas Dinner!” Southern Ag Today 4(52.2). December 24, 2024. Permalink

2024 has been a roller coaster year for the dairy industry.  The year started with low prices, and continuing financial problems that began in 2023. But, price recovery by mid-year spurred some profits and herd growth. 

Low prices led dairy farmers across the country to reduce the number of milk cows in 2024. Dairy cow numbers bottomed out in July at 9.319 million head. That was the fewest since February 2016.  Milk production per cow actually declined, year-over-year, which is a historical rarity. The combination of fewer cows and less production per cow led to lower milk production than the year before in 5 of the first 6 months of 2024. 

Strategies to cut production in response to low prices have led to very tight supplies of replacement heifers. Replacement heifer prices, for those looking to buy, surged to record highs late in 2024. For example, springer heifers hit $2,700 per head in early December at the Smiths Grove Kentucky dairy auction.

Herd expansion due to rising prices later in 2024 was led by Texas dairies. By October, Texas’ milk cow numbers hit a record of 675,000.  That was 40,000 head more than October of 2023.  This herd expansion led to growing numbers in the broader Southern Plains.  Dairy cow numbers continued to decline in other areas of the country.  Across the Southeast, monthly dairy cow inventory is reported for Florida, Georgia, and Virginia.  Compared to the previous year, Georgia and Virginia cow numbers declined by 5,000 and 3,000 head to 85,000 and 66,000, respectively.  Florida cow numbers held constant at 100,000 compared to October 2023. 

Dairies in the Southeast have largely been spared from HPAI. It began in late 2023 or early 2024 with a mystery illness that was identified in the Spring as HPAI.  The illness led to reduced milk production and some more culling. 

Reduced milk production led to higher milk prices. Cheese, butter, powder, and whey prices all increased. Weekly 40 pound cheddar cheese blocks in the wholesale market began the year at $1.53 per pound and climbed to the mid-$1.90s by mid-year, then climbed again to $2.28 per pound.  The bottom dropped out after that peak, much like a rollercoaster, to $1.77 per pound at the beginning of December.  Butter prices did much the same, a year-long climb to $3.19 per pound then a drop to $2.59 per pound, back to where the year began.  Federal order uniform milk prices climbed to over $25 per cwt by late in the year but will start to decline reflecting the lower cheese and butter prices.

Cattle and calf prices keep climbing towards the end of the year.  It’s not uncommon for prices to rise late in the year, but this time between Thanksgiving and New Year’s can be volatile.  This year-end rain in areas of the Southern Plains and fewer calves for sale are working to boost calf prices while.  There is also a week’s worth of data on feeder cattle imports from Mexico which gives some insight on the potential impact of import restrictions on Mexican cattle due to screwworm regulations.  

In the Southern Plains, lighter weight, 400-500 pound, calf prices have jumped about $30 per cwt over the last month.  In the South, the same weight calves are higher, but have not seen quite as large of increase, up about $25 per cwt.  Heavier 500-600 pound steers are up around $20 to $25 per cwt in the Southern Plains and South, respectively.  From Texas across the south to Georgia, 700-800 pound feeders are up about $8 per cwt over the same period.  Seasonal lows in the calf market are in the rearview mirror for 2024.  

Recent rains have helped stocker prices.  The drought monitor map indicates some significant improvement across wheat pasture country.  Better late than never.  The rains have boosted prospects for late pasture grazing and likely boosted supplies of pond and tank water that had run short.  

It appears that fewer calves are for sale following the larger Fall runs.  Over the last month, fewer cattle have been reported in USDA’s weekly market receipts data.  The daily CME feeder cattle index indicates fewer cattle changing hands.  Local auction markets around the country also report fewer animals.  When combined with rain boosting stocker demand, tighter supplies are further helping prices.

Fed cattle prices are climbing too.  Southern Plains fed steers hit $190 last week rebounding from about $185 a month ago.  It looks like the cow market has already passed its seasonal low as beef cow slaughter is declining.  

The first full week of data on feeder cattle imports from Mexico were released last week.  For the week ending November 30^th no cattle (0 head) were reported imported through the 11 ports of entry.   It’s worth remembering that was Thanksgiving week and mid-week holidays can lead to some wide swings in data.  Feeder cattle imports are normally large in November and December as cattle are imported for winter grazing and direct feedlot placement.  The timing of the import restriction is likely causing a bigger price impact than it would at other times of the year when imports are typically lower.

Rain and tighter supplies are some fundamental factors at work in boosting calf prices.  Those positive factors are likely offsetting the impact of some increasing corn prices. Tighter supplies of claves will continue to boost calf prices in the new year.

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Anderson, David. “Rising Prices at Year End.” Southern Ag Today 4(50.2). December 10, 2024. Permalink