Cattle futures gained Tuesday.
Heading into the close, Live Cattle futures were an average of $1.11 higher. Feeder Cattle futures were an average of $1.80 higher
Negotiated cash fed cattle trade ranged from mostly inactive on light demand to a standstill through Tuesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live FOB prices were $181/cwt. in the Texas Panhandle, $180-$181 in Kansas, $181-$182 in Nebraska and $182-$183 in the western Corn Belt. Dressed delivered prices were $288-$294.
Choice boxed beef cutout value was 66¢ lower Tuesday afternoon at $303.91/cwt. Select was 8¢ higher at $292.22.
Heading toward the close and through Jly ’25 contracts, grain futures were narrowly changed. Corn futures were 1¢ to 2¢ higher. Kansas City Wheat futures were fractionally higher. Soybean futures were 2¢ higher.
******************************
Major U.S. financial indices settled little changed Tuesday, ahead of this week’s Fed decision regarding interest rates.
The Dow Jones Industrial Average closed 15 points lower. The S&P 500 closed 1 point higher. The NASDAQ was up 35 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures on the CME were 97¢ to $1.19 higher through the front six contracts.
******************************
Judging by history, U.S. beef cow herd contraction could continue for another year or two, according to Rob Ziegler Extension livestock production and marketing specialist at the University of Wyoming.
“Beef cow slaughter peaked in 2011 at 3.9 million head, roughly midway through the last contraction phase, which ended in 2014 when expansion began,” Ziegler explains in the latest issue of In the Cattle Markets from the Livestock Marketing Information Center. “Slaughter bottomed out in 2015 at 2.2 million head and started increasing again in 2016. Another peak in cow slaughter was observed in 2022 at nearly 4 million head. In 2023, cow slaughter declined by 12% compared to 2022. From January through August 2023, 2.2 million head of beef cows were slaughtered, compared to 1.9 million head during the same period in 2024.”
Given that 35% of annual cow slaughter occurs, historically, between September and December, Ziegler says it appears total cow slaughter in 2024 will be less year over year at around 2.9 million head. If so, it would the second consecutive year of reduced beef cow slaughter.
Even though market dynamics suggest potential herd rebuilding in the next 1-2 years, Ziegler also points to the different situation faced today than during the last expansion.
“Elevated interest rates and higher input costs in recent years have negatively impacted income per cow,” Ziegler says. “The question remains whether these margins will be sufficient to encourage expansion within that timeframe. While the drought in 2024 has been more regional, some heifer retention may be correlated with these areas. That said, heifers retained this year will not contribute to the feeder cattle supply for approximately two more years. These factors suggest that the expansion phase may unfold more slowly than it did in 2014.”