CASH live cattle prices start 2025 at a record-setting pace versus a year ago. Prices the first week of January 2024 averaged $174.01 per cwt live or $274.78 per cwt dressed. The first week of January this year saw prices average $198.93 per cwt live or $314.96 per cwt dressed. Both were all-time record highs and were up $4.12 per cwt live and $7.91 per cwt dressed from the last week of 2024. Packers were buying for a full production schedule last week after two holiday-shortened weeks. The threat of and actual powerful winter storms across the Corn Belt and the Central Plains also likely encouraged more sales. The four-day total was 67,988 head.
The same storms disrupted cattle movement from feedlots to packing plants early last week. Last Monday’s slaughter total was only 109,000 head. But the total rebounded to 126,000 head on Tuesday. Trade however was largely inactive through Thursday morning, with the only sales of note being in Iowa-Minnesota. Cattle there sold at $200 per cwt live. A few loads sold in Kansas Tuesday at $196 per cwt live. Overall prices for the week were likely to set new records again. Thursday morning saw a moderate trade up north at $200-205 per cwt live or $320 per cwt dressed. Futures prices see-sawed somewhat early in the week. But they advanced significantly on Thursday. The February live cattle contract closed up 390 points at $197.60 per cwt.
Choice Cutout Advances Above $330
Boxed beef cutout values meanwhile also see-sawed early in the week but advanced strongly on Wednesday and Thursday. The Choice cutout Thursday reached $330.78 per cwt while the Select cutout reached $308.35 per cwt. The four-day load count was 487 loads, which was to be expected after two holiday weeks. The week before last saw the comprehensive cutout (cuts, grinds and trim) average $319.22 per cwt, up $3.03 per cwt from the prior week. Formula sales again dominated sales, with their total representing 61.4% of the total volume. Spot market sales represented 28.3%, forward sales represented 10.3% and export sales represented 8.2%. CBW reports on November export sales in a following story. Choice beef cutout values finally breeched resistance at $325 per cwt but can this be sustained, asks says Bob Wilson, HedgersEdge.com. The failure to score additional gains would be a red flag for the market going forward, he says.
MEXICAN IMPORTS WILL RESUME NEXT WEEK
IMPORTS of feeder cattle from Mexico are expected to partially resume next week Imports will be slow at first due to the need to implement and test new protocols. Live animal movements are expected to resume fully sometime after the initial reopening. USDA’s Animal and Plant Health Inspection Service (APHIS) suspended imports of live cattle and bison from Mexico on November 22, 2024, following the detection of New World screwworm (NWS) along Mexico’s southern border. This pest can have a significant negative impact on cattle health and U.S. authorities have been working to develop protocols to screen animals coming into the country. Several factors are influencing the timeline and pace of reopening, wrote Jim Wiesemeyer on the Drovers website last week. Both countries have agreed on protocols but implementation requires facility inspections and approvals. There will be a seven-day quarantine after animal checks. Port readiness is another factor. The most important port to get moving again is Santa Teresa, New Mexico. The temporary suspension of cattle imports from Mexico has had notable effects on the U.S. cattle market, wrote Wiesemeyer. About 250,000 to 300,000 fewer cattle are estimated to have been imported due to the suspension. This means the trade disruption has been supporting feeder cattle and calf prices in the U.S., he wrote.
2025 LIVE CATTLE PRICES: ANALYSTS’ FORECASTS
ANALYST Anderson Cozzens Gottschalk Grier Sands USDA 2024 Prices
First Quarter 195 189-195 192.50 194 194 188 181.03
Second Quarter 197 191-199 193.50 194 200 189 188.42
Third Quarter 197 193-203 190 193 195 192 189.26
Fourth Quarter 200 194-206 192 198 203 NF 188.00
2025 Average 197.25 196.25 192.00 194.75 198 191 186.68
(2024)
2025 Beef Production 25.900 26.200 25.600 26.350 26.200 25.665 25.660
ANALYSTS: David Anderson, Texas A&M University; Tyler Cozzens, Livestock Marketing Information Center; Andrew Gottschalk, HedgersEdge.com; Kevin Grier, Kevin Grier Market Analysis and Consulting, Guelph, Ont.; Mike Sands, MBS Research; USDA-Economic Research Service
NOTE: Prices are in $/cwt., basis a western Kansas or Texas Panhandle Choice steer unless otherwise stated. Cozzens’s and USDA’s forecasts are based on the Choice steer, 5-area direct price. NF = no forecast. Commercial beef production forecasts are expressed in billions of pounds.
LIVE CATTLE PRICES MIGHT AVERAGE $195
CASH live cattle prices in 2025 might average just under $195 per cwt live, while beef production might total just under 26 billion lbs. The average live cattle price forecast by five industry analysts and USDA is $194.88 per cwt, versus an average of $186.68 per cwt live in 2024. Their average forecast for beef production is 25.986 billion lbs, versus 27.035 billion lbs in 2024. The live cattle prices are based on both the 5-area steer price and western Kansas or Texas Panhandle. The average price basis western Kansas this past year was $184.95 per cwt, says Andrew Gottschalk, HedgersEdge.com. This was $11.40 per cwt above the average for the previous year and was a new record high level.
Fed cattle prices basis western Kansas in 2025 could post an annual average of $192 per cwt, says Gottschalk. Intra-year price estimates for 2025 ranging from $178-206 per cwt might appear to be extreme but this is within historical parameters. Since the beginning of this century, the average deviation from the annual average fed cattle price basis western Kansas is plus or minus 11%. The projected range for 2025 is less than this average. Feeder cattle and calves should record additional price gains during the year. Steer calves 500-550 lbs are estimated to average $345 per cwt, up from $315 per cwt last year. Feeder steers 750-800 lbs are estimated to average $275 per cwt, up from $250 per cwt last year, he says.
ANALYST URGES PROFIT MAXIMIZATION
HIGH cattle prices make profitability likely for most beef producers in 2025 but those who want to maximize profits need to do more than just take advantage of the current market. So says analyst Derrell Peek of Oklahoma State University. Profit maximization means doing a good job of cost management. Cattle producers always enjoy markets that make the revenue side of the operation more favorable but the best opportunity to impact profitability comes from managing costs, where producers have much more control. Feed and pasture costs are the largest component of cow-calf cost of production, and managing total feed cost is a critical part of profit maximization, says Peel. Get a handle on feed expense. Cows are fundamentally grazing machines and the most profitable cow-calf producers manage pastures and grazing so that cows do most of the work as much of the time as possible to provide their nutritional needs. Analysis by Kansas State University shows that the most profitable cow-calf operations have total feed costs that are 24% lower than the least profitable operations, he says. Lower total feed costs are the result of the most profitable operations spending 39% less on non-pasture feed (harvested forages and supplemental feed) and spending 12% more on pasture costs compared to the least profitable operations. Management to ensure pasture quantity and quality, and emphasizing grazing, is much more cost effective than relying on non-pasture feeds, he says.
NOVEMBER SEES EXPORT GAINS
NOVEMBER proved to be another terrific month for U.S. pork exports and a good month for beef exports. Pork exports remained on a record pace, while beef and lamb shipments also increased substantially from November 2023. Pork exports totaled 272,141 metric tons (mt) in November, up 5% from a year ago, while export value increased 6% to just under $783M, says the U.S. Meat Export Federation (USMEF). These results included an especially strong month for pork muscle cut exports, which increased 6% to 221,652 mt. Muscle cut export value was the third highest on record at $671.4M.
November was another terrific month for pork demand in Mexico and throughout the Western Hemisphere, says USMEF President and CEO Dan Halstrom. It was also encouraging to see exports trend higher to Japan and sustain strong growth in Oceania and Southeast Asia. Through the first 11 months of 2024, pork exports were also up 5% year-over-year in volume (2.76M mt) and 6% in value ($7.85 billion). When December results are available, exports will exceed 3M mt for the first time, topping the previous high of 2.98M mt reached in 2020. Export value will exceed $8.5 billion, easily surpassing the 2023 record of $8.16 billion, says USMEF.
November pork exports to leading market Mexico totaled 99,849 mt, the fourth highest of the year and nearly matching the strong volume from a year ago, while export value increased 2% to $225.7M, says USMEF. USDA’s Food Safety and Inspection Service transitioned to electronic export certificates for Mexico on November 4, leading to delays for some shipments, but November volumes confirm these obstacles were temporary. January-November exports to Mexico were 5% above the record pace of 2023 (when exports increased by 14% over 2022) at 1.05M mt. Export value climbed 10% to $2.33 billion, only slightly below the full-year value record of $2.35 billion posted in 2023.
November beef exports increased 10% year-over-year to 109,288 mt, while value climbed 11% to $872.7M, says USMEF. For January through November, exports increased 5% in value ($9.56 billion) from the same period in 2023, despite a 1% decline in volume (1.18M mt). Despite continued economic headwinds in Asia, demand for U.S. beef strengthened in South Korea, China and Taiwan, and exports were fairly steady to Japan, says Halstrom. The strong performance in Mexico and outstanding demand for variety meat in Egypt were also critical for bolstering carcass value, he says.
Exports To Korea Were Up 20%
Beef exports to leading value market South Korea reached 21,499 mt in November, up 20% year-over-year and the largest since March, says USMEF. Export value increased 29% to $207.7M, also the highest since March. For January through November, exports to Korea achieved a 5% increase in value ($2.01 billion) despite a 7% decline in volume (210,282 mt). While this was the third consecutive month of renewed momentum for U.S. beef in the Korean market, the outlook for December was cloudy as Korea has been mired in political turmoil and the won recently weakened to its lowest level in 15 years versus the U.S. dollar. Following a September-October slowdown, beef exports to Taiwan rebounded in November to 5089 mt, up 40% from a year ago, while export value climbed 43% to $58.6M. Through the first 11 months of 2024, shipments to Taiwan were steady with the previous year’s pace at 56,352 mt, while value climbed 9% to $632.4M, says USMEF.
Mexico’s demand for U.S. beef remained robust in November, with exports increasing 6% from a year ago to 18,914 mt, while value was up 4% to $107.4M, says USMEF. January-November exports to Mexico reached 211,920 mt, up 12% year-over-year, while value jumped 14% to $1.23 billion. Both already exceeded the full-year totals from 2023 and export value is the highest since 2009. Beef export value equated to $428.70 per head of fed slaughter in November, up 13% from a year ago and the highest since June. This pushed the January-November average to $412.58, up 5%. Exports accounted for 14.4% of total November beef production and 11.8% of muscle cuts, up substantially from the year earlier ratios of 12.7% and 10.4%, respectively. January-November exports accounted for 13.8% of total production and 11.5% of muscle cuts, down slightly from 13.9% and 11.7%, respectively, during the same period in 2023. More on beef exports on the next page.
Exports To China Show Momentum
Beef exports to China/Hong Kong trended lower in 2024 but showed renewed momentum for the second consecutive month, says USMEF. November shipments increased 8% from a year ago to 18,895 mt, while value climbed 5% to $165.8M. January-November shipments to the region were still down 7% year-over-year in volume (196,437 mt) and down 3% in value ($1.81 billion). China’s Ministry of Commerce recently opened a safeguard investigation on the impact of rising beef imports on domestic producers, with an investigation period of 2019 through June 2024. China’s overall beef imports set another record in 2024, mainly due to growth from South America, says USMEF.
AUSTRALIA WILL HAVE GOLDILOCKS YEAR
THIS year is shaping up as one of those rare “goldilocks” cycles in the Australian beef industry. That is when all parts of the supply chain, cattle producers, lot feeders and beef processors/exporters get a share of the profit margin pie. Meat and livestock supply and demand, seasonal factors, processing capacity improvements and currency outlook all suggest this is possible. So says Jon Condon of Beef Central, the country’s leading beef news website.
The recent past has seen Australian beef margin share swing alarmingly from year to year, as herd size, weather conditions and other factors came into play, says Condon. Historically, both processors and producers have tended to make up for long periods of loss-making with financial “recharge” periods, when margin is strongly in their favor. The 2021-22 years saw cattle prices hit unprecedented record highs, as processors and lot feeders scrambled to secure feeder and slaughter stock during herd rebuilding. Flatback heavy feeder cattle during much of 2022 traded in a range around A$5.50 per kilogram for long periods, at one point pushing into the A$6.00s, thus valuing a typical 450 kg feeder steer at A$2700, he says.
Beef processors racked up big losses during the period as a result, while many producers, blessed with good seasonal conditions, stacked up money like King Solomon, says Condon. But two years earlier during 2019, it was beef processors making a killing (both metaphorically and figuratively speaking), with abundant, relatively cheap cattle due to herd liquidation, coupled with vigorous export customer demand, especially in new frontiers like China. Even last year, lot feeders had a field day from mid-August to early December, with feeder steer prices collapsing by A$1 per kg to as low as A$2 per kg, as producers panicked in the face of dry conditions and a depressing summer seasonal outlook at the time. Young cattle took a similar path, with the EYCI falling A$2 per kg (dressed weight equivalent) between late August and mid-October. says Condon.
SMITHFIELD FILES FOR AN IPO
SMITHFIELD Foods, the largest U.S. pork producer, is poised to be a publicly-traded company again in the U.S. It filed last Monday with the Securities and Exchange Commission for a proposed initial public offering. It plans to list its shares on the Nasdaq Global Select Market under the symbol SFD. The Smithfield, Va., company did not indicate how many shares it plans to sell or how much it aims to raise. China’s WH Group bought Smithfield in 2013 in a $4.7 billion deal that was then one of the biggest takeovers of an American business by a Chinese company. The combined company went public in Hong Kong the following year. WH Group, the world’s largest pork-producing company in terms of sales, last year said it was planning a U.S. IPO for Smithfield. Smithfield said it generated sales of $14.2 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.3 billion for the 12 months ended September 29, 2024. The company says it plans to use proceeds from the offering for investments in infrastructure, automation and capacity expansion, reported The Wall Street Journal.