CASH live cattle prices set a new record high for the second week in a row and likely did so again last week. Live prices basis the 5-area steer price averaged $202.58 per cwt the week before last. This was up $3.65 per cwt from the prior week and was the first time the average was above $200 per cwt. Dressed prices averaged $320.25 per cwt, up $5.29 per cwt from the prior week. Several factors have caused prices to increase so far this year. Parts of cattle feeding country have been hit by adverse winter weather, which has caused cattle feeders to delay marketings to add back weight on cattle. In addition, front-end cattle supplies (those on feed 150 days or more) on January 1were estimated to be down 2.2% from January 1 last year.
The first two weeks of this year saw a moderate cash trade in terms of cattle sold. The first week reported 67,988 head sold and the second week reported 60,902 head sold. Trade was characteristically slow to develop last week, although Monday saw 1086 head sold. Prices in Iowa-Minnesota averaged $205.50 per cwt live or $320 per cwt dressed. Prices in Kansas averaged $200 per cwt live. The only reported trade Tuesday was in Iowa at $205-205.50 per cwt live. Wednesday saw more trade, with prices up north at $203-205 per cwt live or $320 per cwt dressed. Prices down south averaged $201 per cwt live. Thursday saw a much more active trade up north at similar prices. Prices down south averaged $200-201 per cwt live.
Marketable fed cattle supplies remain above prior year levels but producers continue to remain firm with their offerings, says Andrew Gottschalk, HedgersEdge.com. The recent cold weather has likely slowed performance in most areas of cattle feeding country. With marginal gain costs remaining significantly below the selling price of fed cattle, producers are expected to continue to hold firm with their offerings. Extreme cold conditions were forecast to engulf the southern and eastern regions of cattle feeding country by late Friday, he says.
Carcass Weights Set New Records
Carcass weights meanwhile set new records for heifers and overall carcasses in the latest reported week ended January 4. Heifer weights averaged 878 lbs, up 10 lbs from the week before and up 27 lbs from the same week last year. Steer weights averaged 959 lbs, up 3 lbs on the week before and up 22 lbs on the same week last year. Overall weights averaged 881 lbs, up 7 lbs and up 27 lbs, respectively. This was the equivalent of adding 15,965 cattle to the weekly harvest of 504,893 head, says HedgersEdge.com.
Boxed beef cutout values meanwhile also increased for the second week in a row, although they remained far below the record levels seen during the COVID-19 pandemic. The national comprehensive cutout (cuts, grinds and trim) the week before last averaged $323.45 per cwt, up $4.23 per cwt from the prior week. Formula sales accounted for 59.3% of the total volume of 6690 loads. Spot market sales accounted for 32.1%, forward sales accounted for 8.6% and export sales only 7.7%. Export sales the first two weeks of the year were disappointing by normal standards. January-November exports last year accounted for 11.5% of muscle cuts produced.
Reduced beef production over the two holiday weeks has also caused the prices of fatty trimmings (50CL) and domestic lean manufacturing beef (90CL) to increase sharply and be well above last year’s levels. The 50CL price the week before last averaged $104.59 per cwt, up 48.5% on the same week last year. The 90CL price averaged $335.24 per cwt, up 28.2% on last year. Conversely, by-product values have seen little increase so far this year. The value of $11.39 per cwt the week before last was down 2.6% on the same week last year.
CATTLE ON FEED FORECASTS
David Anderson, Texas A&M University: COF 99.4%, placed 99.0%, marketed 101.4%; Tyler Cozzens, Livestock Marketing Information Center: COF 99.6%, placed 100.3%, marketed 101.4%; Andrew Gottschalk, HedgersEdge.com: COF 100.5%, placed 106.8%, marketed 101.7%; Rich Nelson, Allendale Inc: COF 99.7%, placed 100.8%, marketed 101.1%; Lori Porter, Allegiant Commodity Group: COF 99.8%, placed 101.6%, marketed 101.2%; Mike Sands, MBS Research: COF 100%, placed 103%, marketed 101%
COF TOTAL IS CLOSE TO A YEAR AGO
THE number of cattle on feed on January 1 was likely close to last year’s total, with December placements up 2% on the prior year and marketings down 3.2% after taking into account one extra slaughter day in December versus the prior year. The estimated January 1 COF total was historically large for the date, says Mike Sands, MBS Research. This suggests that fed cattle supplies in early 2025 will be larger than last year and at much heavier carcass weights. As a result, first quarter fed beef production is expected to be well above the modest, weather-disrupted levels of last year. But late spring and early summer will transition to much smaller supplies during the last half of the year. Last year’s smaller calf crop, coupled with even a fractional increase in heifer retention, will continue to pare feeder cattle supplies and support prices at historically high levels, he says.
Although December feedlot placements were projected to be modestly higher than last year, this was largely a function of last year’s historically small number, says Sands. Aside from last year, the projected December placements were the smallest since 2015 and more than 4% below the average of the past five years. The seasonally small placements in November/December hint at seasonally smaller fed cattle supplies heading into the late spring and summer months, particularly if placements weights were light. Feeder cattle prices have escalated sharply from lows last fall, leading to higher breakevens, which may also have tempered placement interest in late fall and early winter. Feed costs are also on the upswing, boosting projected costs of gain in the wake of recent smaller corn production estimates and projected tighter carryover stocks, he says.
December marketings were projected slightly above last year but all of the increase was the result of an additional business day during the month, says Sands. Adjusted for that difference, the December marketing rate was about 4% below last year. At least part of the marketing shortfall was related to the seasonally small kills around the year-end holidays, which were exacerbated by the holidays falling on Wednesday. In addition, tighter fed cattle supplies in late fall and early winter reflected the seasonally small feedlot placements in June and July. This suggests more fed cattle were pushed from December into the new year, which seems to be confirmed by the record heavy carcass weights in early 2025, he says.
BEEF PRICES CREATE DAIRY CHALLENGES
HIGHER beef prices are creating additional challenges for dairy herd expansion, according to market analyst Mike North with Ever.ag. Dairy producers have been using sexed semen to get beef calves from dairy cows as cattle markets have notched record highs, he says. Some of these two- and three-day-old calves are bringing as much as $1000. If a producer gets an opportunity to make $1000 on a calf without having to feed it for a year and a half, that is a fantastic opportunity, he told Brownfield Ag News.
The beef on dairy trend has resulted in tight replacement heifer supplies and higher heifer prices, says North. Some animals moving in the Northwest the week before last were north of $4000 an animal. That’s a pretty tall price and so now there are people starting to switch some of their breeding back to that replacement animal. In Wisconsin for example, USDA’s report on November prices paid to farmers showed the cost of a replacement dairy animal in October 2024 was 69% higher than in October 2023. The price jumped from $1990 to $2850 in that time, an increase of $860. The amount of inventory cut out of the nation’s beef herd has been greater than the new beef inventory from the dairy herd, so the widespread adoption of beef on dairy has not compromised the ability for beef producers to expand when the time is right, he says.
USDA PULLS MARKET RULE
USDA withdraws a highly controversial proposed rule about livestock markets after receiving thousands of comments about it. With the Biden Administration now at an end, it appears that USDA ran out of time to give the comments adequate attention. The proposed rule, entitled “Fair and Competitive Livestock and Poultry Markets,” could have upended years of marketing agreements in the beef industry. This is why it was so bitterly opposed by industry groups such as the National Cattlemen’s Beef Assn (NCBA). It welcomed the withdrawal of the proposed rule. This harmful regulation would have dismantled current cattle marketing agreements, reversed decades of innovation in the cattle industry and threatened producer profitability, it said.
Under the Bidenomics agenda, USDA pushed regulations like this one which would have undermined the free market, harmed hardworking cattle producers, and far exceeded the agency’s authority granted by Congress, said NCBA Executive Director of Government Affairs Tanner Beymer. NCBA is pleased that USDA recognized its failed approach and withdrew this rule. NCBA will continue advocating for sound market principles and it looks forward to working with the next Administration on enhancing profitability opportunities for America’s cattle farmers and ranchers, he said.
The rule sought to define unfair practices under the Packers & Stockyards Act. USDA received over 13,000 comments on the proposed rule. The agency said it decided to withdraw the proposed regulation, citing complexity and length of time needed to finalize the rule as the reasoning behind its action. USDA said it will reexamine these issues in the future, allowing more time to discuss with stakeholders how to best implement the requirements of the P&S Act.
USDA Finalizes Poultry Payment Rule
However, USDA rolled out its third installment of regulatory reforms under the P&S Act last Tuesday. It finalized a new rule, known as “Poultry Grower Payment Systems and Capital Improvement Systems.” The rule seeks to give chicken farmers better insight into companies’ payment rates for their birds, said USDA. Specifically, the rule will work to institute stability in the tournament system, to provide farmers with key information on capital improvements that companies require farmers to make in order to keep or renew contracts, and to give farmers stronger leverage when companies do not adhere to the rules.
Industry trade group the National Chicken Council (NCC) has voiced its opposition to the rule since it was first introduced last year. With the finalization of the regulation, NCC’s concerns continue, it said. The Biden administration, with just six days remaining, is racing to impose the last pieces of its anti-business regulatory agenda, said NCC president Harrison Kircher. The rule, which Congress never asked for, will lead to rigid, one-size-fits-all requirements on chicken growing contracts that would stifle innovation, lead to higher costs for consumers, decrease competition and cost jobs by driving some of the best farmers out of the chicken business. The vast majority of chicken farmers in rural America are happy and prosper raising chickens in partnership with companies .They don’t want the government meddling on their farms and telling them how to run their businesses, he said.
JBS SETTLES WITH DOL
JBS USA Food Co. and the Department of Labor (DOL) reach an agreement that the company will put $4M toward individuals and communities affected by unlawful child labor practices across the U.S. The agreement includes a commitment by JBS to hold key elements of its supply chain, service providers and third-party contractors accountable for child labor. JBS is taking significant steps to ensure children are not put in harm’s way at its facilities or by its contractors, said the DOL’s Seema Nanda. JBS said it entered into the agreement to serve as an industry leader, showcase the innovative actions the company has taken, encourage other entities to follow suit and set the standard for third party contractors’ compliance with labor and employment laws. JBS admits no liability as part of the agreement, it said.
AUSTRALIA SETS MEAT EXPORT RECORDS
GLOBAL demand for high quality protein helped Australia achieve the biggest year in its history for its red meat exports, with records set for beef, lamb, mutton and goatmeat. For the 12 months ended December 31 December, Australia exported 2.24M metric tons (MT) of red meat to 104 countries, representing the largest volume ever exported. High volumes were exported across all red meat categories. Beef exports reached 1.34M mt (shipped weight), lamb exports reached 359,229 mt, mutton exports reached 255,098 mt and goatmeat exports reached 51,489 mt, according to a report by Jon Condon on Beef Central.
The data from the Department of Agriculture highlighted Australia’s strong reputation as a reliable supplier of high quality red meat, with overseas demand remaining strong as domestic supplies rose, said Meat & Livestock Australia (MLA) global supply analyst Tim Jackson. In 2024, the cattle herd and sheep flock both reached maturity and slaughter lifted substantially. At the same time, the global supply landscape was favorable for Australia, with beef exports from the U.S. easing as the American cattle herd reached a 72-year low following years of drought. Global economic pressures continue to affect consumer confidence, said Jackson. However, high levels of trust and an industry-wide dedication to quality has driven demand for Australian red meat internationally. Australia’s market access position was also important in driving exports. About 87% of exports went to countries with which Australia has a free trade agreement, including 95% of its beef exports, he said.
The U.S. was the largest market for beef, lamb and goatmeat, while China was the largest market for mutton in 2024, says Condon. Australian beef exports were 22% higher than 2023 exports and 4% higher than the previous record of 1.29M mt set in 2014. Helping secure the new record annual shipment volume was an extraordinarily high December export trade, which hit an in-month record of 127,393 mt. December and January are normally quiet months for Australian beef export activity, as weather often bears an influence and many processors take their annual holiday breaks. However, last month proved to be the exception, with December registering the third highest monthly volume all year, exceeded only by October at 130,000 mt and July at 129,000 mt, says Condon.
Tariff Adjustments Added To Surge
Some of the unusual late surge in trade was due to shipments being made in advance of Safeguard Tariff adjustments due to take place from January 1 in South Korea and China where market protection tariffs leapt due to unusually large shipments earlier in the year, says Condon. The strongest growth in 2024 was seen in the U.S. market, where exports increased 60% from 2023 to 394,716 mt, and in Southeast Asia, where exports rose by 33% to 177,684 mt. Exports of Australian grain-fed beef also broke records in 2024, with 375,195 mt of grain-fed beef exported. Record high capacity and numbers of cattle on feed translated into strong turnoff figures during 2024, leading to strong supply and high exports, says Condon.
Laying the foundation for the new beef export record has been the completion in national herd rebuilding after the 2019-20 drought years, plus a long-term increase in carcass weights, says Condon. While there was some evidence of destocking in regions of southern Australia during the back half of 2024, northern Australia generally had adequate to better-than-good grass growing conditions through the year. MLA last September estimated the national cattle herd size at 30.2M head. But it forecast a 2% decline this year to 29.6M head due to the effects of herd retraction in areas of southern Australia, says Condon.
Adult cattle slaughter last year reached 8.2M head, the highest figure since 2019, says Condon. Slaughter is expected to edge higher to 8.38M head this year. Looking forward, slaughter will remain relatively stable in 2025 and 2026 as turn-off continues from a high base. MLA anticipates beef production this year to reach 2.55M mt, as international demand for beef will remain strong, says Condon.