THE live cattle market marks time between this year’s two holidays, with very little reported cash trade through Thursday. Just over 1100 head sold on Monday in Iowa and Kansas, while another 533 head sold in Kansas and Texas Thursday morning. Prices down south on both days were $190 per cwt live while prices up north were $192-194 per cwt live. No trade had occurred in Nebraska through Thursday afternoon.
The lack of trade reflected several factors. Fed beef packers were buying for a second holiday-shortened week and likely had the majority of their cattle supply set up through formula pricing. Second, their margins were also in the red at a negative $69.95 per head last Thursday, according to HedgersEdge.com. Their margins the week before last were negative by $45.90 per head. This meant they faced seven weeks of negative margins in a row. In addition, the slaughter total last week was not expected to be above 490,000 head, below the 500,521 head of the same week last year. Analysts had initially forecast a kill of around 550,00 head. But they revised down their forecasts after Tuesday’s total slaughter was only an estimated 38,000 head.
The week before last saw the 5-area steer prices average $194.73 per cwt live or $305.64 per cwt dressed. These were up $0.42 per cwt live and $2.20 per cwt dressed, respectively, from the week before. Analysts expected a late trade last week at prices at or just below these prices. Carcass weights meanwhile continue to decline from their record levels of late November. Steer weights for the week ended December 14 averaged 950 lbs, down 2 lbs on the week before but up 9 lbs on the same week last year. Heifer weights averaged 866 lbs, up 1 lb and 12 lbs, respectively. Overall weights averaged 868 lbs, down 1 lb but up 8 lbs, respectively. This was the equivalent of adding 12,910 cattle to the weekly harvest of 609,630 head, says HedgersEdge.com.
Boxed beef prices rose sharply last Thursday because of the holiday-reduced production. The Choice cutout increased by $4.41 per cwt to $320.39 per cwt, versus $308.20 per cwt average for the week before last. The Select cutout Thursday increased by $2.02 per cwt to $288.77 per cwt, versus $284.25 per cwt the week before last. The national comprehensive cutout (cuts, grinds and trim) the week before last averaged $310.40 per cwt, up $2.00 per cwt from the week before. Formula sales accounted for 54.8% of the total volume of 6597 loads. Spot market sales accounted for 26.9%, forward sales 18.3% and export sales 12.1%.
In other cattle news, imports of slaughter cattle from Canada looked set to be sharply higher in 2024 than in 2023 but imports of feeder cattle were set to be lower. Imports of feeder cattle from Mexico looked set to be somewhat lower because of a temporary ban on imports due to the discovery of New World Screwworm in Mexico. Imports of Canadian slaughter cattle for the year to December 14 totaled 561,946 head, up 15.2% on the 487,900 head for the same period in 2023. Feeder cattle imports at 147,814 head were down 14.9%. Mexican feeder cattle imports to December 20 totaled 1.243M head, versus 1.241M head in 2023.
BEST WISHES FOR 2025: Cattle Buyers Weekly wishes you a prosperous and fulfilling 2025 and trusts you have enjoyed the holiday season wherever you are. CBW has begun its 38th year of covering the North American and global meat and livestock industry, with a special focus on the U.S. beef industry. CBW thanks its readers for their unwavering support over the past 37 years. It is privileged to have readers in every sector of the industry, in allied industries and in government agencies in the U.S. and in other countries. This level of support is why CBW has reached this milestone.
COF TOTAL WILL TREND LOWER
THE monthly Cattle on Feed (COF) total is set to go lower for the next six months. The total seasonally should begin to trend lower into the late-May/June period, says Andrew Gottschalk, HedgersEdge.com. The previous five-year average decline to the lows is 647,000 head. but front-end fed cattle supplies project to remain above prior year levels into June. From January to June, this category is estimated to increase 616,000 head versus an increase of 483,000 head in 2024. This will represent a gain of 133,000 head or 27.5%, he says.
As to the previous five-year average comparison, therein lies some positive supply news, says Gottschalk. The previous average registered a gain of 796,000 head for this timeframe, versus the estimated gain of 616,000 head projected during January to June 2025. The trend for 2025 would represent a reduced buildup versus the previous five-year average, a drop of 180,000 head or down 22.6%. In a further breakdown of this data, it must be noted that the projected beginning inventory for January 2025 is only 49,000 head below January 2024. This would exceed the previous five-year average by 209,000 head, he says.
In addition, carcass weights at the beginning of the New Year are expected to be substantially above prior year levels, says Gottschalk. It is thus not difficult to acknowledge that for the beginning of the year, the front-end fed cattle supply will be less current than on January 1 2024. As such, the expected seasonal advance in cash live cattle prices from the fourth quarter to the first quarter likely will be challenged to exceed the gain seen in 2024 for that timeframe. An equivalent gain in the first quarter of 2025 would see prices average $191.50 per cwt live, basis western Kansas, he says.
USDA’s latest COF report showed that the December 1 total was 11.982M head, 99.7% of a year ago. The total was 0.2% lower than analysts’ average forecast and was 24,000 head lower than a year ago. Feedlots in November placed 1.796M head, 96.3% of the prior year, and marketed 1.725M head, 98.5% of a year ago. November placements were 0.4% higher than forecast while November marketings were also 0.4% higher than forecast. There was one less marketing day versus November 2023.
Four States Had Fewer On Feed
Four states, Arizona (down 13%), Kansas (down 3%), Texas (down 1%) and Washington (down 4%) had fewer cattle on feed than a year ago. Texas had the most cattle on feed with 2.880M head, with its total down 30,000 head from a year ago. Nebraska was second with 2.600M head, up 20,000 head, and Kansas was third with 2.420M head, down 80,000 head. Only three states placed more cattle than a year ago. Iowa placed 3% more, Kansas 4% more and Nebraska 4% more. Five states marketed fewer cattle in December than last year. California marketed 7% fewer, Colorado 13% fewer, Kansas 4% fewer, South Dakota 6% fewer and Texas 10% fewer.
Regarding placement weights, the under 600 lb category saw 35,000 fewer cattle placed than last year (495,000 head). The 600-699 lb category saw 20,000 fewer cattle placed (420,000 head). The 700-799 lb category saw 5000 fewer placed (375,000 head). The 800-899 lb category saw 14,000 fewer placed (276,000 head). The 900-999 lb category saw 5000 more placed (145,000 head) and the 1000 lbs plus category saw the same number placed (85,000 head).
The total cattle complex should register another decent year in 2025, although the annual gains will likely be less than during 2024, says Gottschalk. The number of feeder cattle and calves available for placement will be further constricted in 2025 by expected increases in heifer retention. This retention, which was limited in 2024, upon acceleration will reduce the supplies available. The greatest hazard to the aforementioned supply scenario would be widespread drought in cattle country, which could accelerate further herd reduction, he says. Per the most recent Drought Monitor, 38.87% of the lower 48 states were in various degrees of drought as of December 17. Who knows what Mother Nature might deliver next? Beef demand this year was positive but could, should it falter, also pose a threat to estimated prices, he says.
2025 IMPORTS MIGHT TOTAL 4.710 B LBS
BEEF imports in 2025 might total4.710 billion lbs, which would be a 3% year-over-year increase, says USDA’s Economic Research Service (ERS). Based on increased imports from Oceania and South America in 2024, ERS raised its beef import forecast for the fourth quarter by 80M lbs to 1.170 billion lbs, bringing its annual forecast to 4.588 billion lbs. If realized, this would be a 23 % increase from 2023. Beef imports rose again in October to 414M lbs, more than 35% higher year-over-year, says ERS. Imports were up from last year from all major suppliers except Canada. Imports from Australia have risen since May and have followed a pattern similar to that of 2014. Year-to-date imports from Australia have surpassed imports from Canada, putting Australia back as the top supplier of beef to the U.S. for the first time since 2016, says ERS.
Beef imports from Brazil continue to be strong, despite being subject to the higher out-of-quota tariff rate through the end of the year, says ERS. During the previous two years, U.S. imports of Brazilian beef tapered off in the last few months of the year as importers waited for the quota to reopen on January 1. However, demand for beef trimmings and beef prices in the U.S. remain elevated enough to offset the extra costs of the tariff. Additionally, beef production and total exports from Brazil remain elevated, with total exports to all countries up more than 29% through October according to the Trade Data Monitor, says ERS.
Imports from Argentina and Uruguay were also strong year-over-year in October, says ERS. As of December 9, the individual quotas for Argentina and Uruguay were 96% and 89% filled, respectively. After adjusting the import forecast for fourth quarter 2025 to reflect a similar seasonality pattern to 2024, further changes to the 2025 annual beef import forecast primarily reflect the changes made to U.S. beef production. Higher expected imports resulting from decreased domestic beef availability and increased beef imports from Mexico were partially offset by an expectation of decreased demand for lean trimmings due to lower anticipated steer and heifer slaughter, says ERS.
ERS Reviews Import Percentages
ERS in its latest monthly Livestock, Dairy and Poultry Outlook report also reviewed the percentages of annual domestic use or disappearance that were imported for red meats and dairy in 2016 through 2023, with forecasts for 2024 and 2025. These shares are calculated by dividing annual imports by annual domestic disappearance, says ERS. USDA calculates this as a residual measure of supply (the sum of production, beginning stocks and imports, minus the sum of exports and ending stocks) that is used by the domestic market.
The red meat category is heavily influenced by the effects of beef imports, which in 2019-2023 were an average 70.5% of total red meat imports, followed by pork at 22.9% and lamb at 6.6%, says ERS. Firm domestic beef demand has contributed to the rising share of beef imports for domestic use as domestic production has declined since peaking in 2022. In 2025, the share of imports to domestic use for beef is projected to reach a record 16.9%. The share for pork will decline to 5.1% and the share for lamb is expected to remain historically elevated at 7.3% on strong import demand, says ERS.
RESOLUTION RELIEVES RANCHERS
A LAST minute passage of a congressional bill brings relief to livestock producers. Congress the weekend before last passed and President Joe Biden signed the American Relief Act by a vote of 366-34. The bill contained a continuing resolution (CR) to fund the government and reauthorized Livestock Mandatory Reporting through March 14, 2025. It also extended the 2018 Farm Bill through September 30, 2025. The bill provides $2 billion in disaster assistance for livestock producers impacted by drought, wildfire or hurricanes and $10 billion for direct production and economic loss payments to offset the inflation-driven rise in input costs during the 2024 crop year. The CR also maintains appropriations riders to prohibit the Environmental Protection Agency from collecting greenhouse gas emissions data from livestock production and manure management operations and to prevent implementation of the electronic logging device rule for livestock haulers.
USDA WANTS MORE INVESTIGATION
USDA says further investigation and analysis are needed before it introduces new rules under the Packers and Stockyards Act on price discovery in cattle markets. CBW in its December 23, 2024 issue outlined USDA’s main reasons for the new rules. This story examines further action that USDA says it will likely take. It notes that the conclusions in its recent report are interim. Because USDA has largely not enforced competition regulations in meat merchandising for several decades, part of the purpose of its investigative study has been to gain familiarity with current practices, it says.
While some parts of industry, including some large packers, distributors and retailers, cooperated, several have resisted to date, says USDA in its report. Accordingly, based on the information received to date, USDA intends to take immediate steps to further investigate concerns about fair competition in the food industries, including enforcing subpoenas where necessary. It will deepen its examination and public engagement regarding how to more vigorously and effectively regulate under the P&S Act so that market participants are protected from actions that violate the P&S Act and the antitrust laws. USDA outlines several actions it expects to take. It will adjust its market surveillance and investigative actions as appropriate in response to changing practices in meat merchandising. It will examine how to more vigorously enforce the P&S Act in the meat merchandising arena, including potential updates to P&S Act regulations and enforcement policies. It will use its subpoena authority under the P&S Act to gather more information from regulated entities to assess the extent of the problematic conduct uncovered in this report, it says.
USDA will also enhance cooperation between its Food Safety Inspection Service and its Agricultural Marketing Service’s Packers and Stockyards Division to enhance market monitoring, rulemaking and enforcement, it says. These efforts will complement FSIS’s ongoing Animal Raising Claims Review and updates to relevant guidance. While these are first steps, they represent USDA’s intent to more vigorously address practices in the food markets that may harm fair, open and competitive markets, undermine fair prices for producers and consumers and otherwise burden economic opportunity for small businesses and rural economies, says USDA.
Meat Institute Denounces Request
Following USDA’s requests for more information, the Meat Institute (which represents meat processors) again denounced the attempt as over regulation. USDA is once again attempting to assert government control over the free market to the detriment of cattle producers, packers and consumers, said Meat Institute President and CEO Julie Anna Potts. This is not about transparency. This is about the government dictating how cattle may be bought and sold. Thanks to the transparency already required in these markets, the industry knows that cattle producers have received record high prices for several years, she said.
When USDA says it wants to enhance fairness in cattle markets, it means pick winners and losers, said Potts. It wants to end the use of Alternative Marketing Arrangements (AMAs) and force producers and packers into the cash market. AMAs are a livestock producer-driven innovation that rewards producers who are developing value-added products by investing in their herds’ genetics and other traits, improving quality or raising cattle using certain sustainability practices. Despite the Administration’s belief otherwise, cattle production operations are not all the same and the cattle they produce are not one-size-fits all, said Potts. Moving back in time to a commodity cattle market will reduce competition, innovation and quality, ultimately hurting the entire industry. Livestock producers ought to be rewarded for their innovation in the marketplace. AMAs offer producers the very benefits USDA says it wants to support: choice, flexibility, transparency and even higher prices. Most importantly, AMAs provide consumers with more choices and a consistent supply of higher quality beef at stable prices, said Potts.