Winter Cattle Journal 2025 | Cattle Market Situation and Outlook: Looking Ahead to 2025
2024 So Far
Cattle Inventories
On January 1, 2024, the U.S. had the smallest cattle industry in decades as indicated by numerous measures:
Head
- All Cattle and Calves 87.16 million Smallest since 1951
- Beef Cow Inventory 28.22 million Smallest since 1961
- Beef Replacement Heifers 4.86 million Smallest since 1950
- Estimated 2024 Calf Crop 33.1 million Smallest since 1941
Feedlot inventories peaked in 2022 but have declined relatively slowly since. For the past year, feedlots have held average monthly inventories equal to the year prior with continued heifer feeding and by increasing average days on feed. However, both feedlot placements and marketings are declining on average.
Cattle Slaughter and Beef Production
Cattle slaughter is down in 2024, but by less than previously expected. Through the first ten months of the year, total cattle slaughter is down 3.8 percent year over year. Fed slaughter is down 0.6 percent, for the year to date with steer slaughter up slightly by 0.1 percent from last year, and heifer slaughter down 1.5 percent year over year. Steer and heifer carcass weights have increased sharply in 2024, with steer carcasses averaging 24 pounds heavier than last year and heifer carcasses up 19 pounds year over year. Total fed beef production is up by 2.0 percent year over year through October.
Cow slaughter is sharply lower, with beef cow slaughter down 17.6 percent year over year and dairy cow slaughter down 13.3 percent from one year ago in the first ten months of the year. Total nonfed beef production is down 13.0 percent year over year, contributing to a total beef production decrease of 0.6 percent thus far in 2024. Total beef production may be plus or minus unchanged from last year by the end of the year.
Boxed Beef and Beef Demand
Retail beef demand has remained robust in 2024. Retail all-fresh beef prices have averaged 6.2 percent higher year over year through October. Choice boxed beef prices have averaged 2.6 percent higher compared to last year despite increased fed beef production. The sharp decline in nonfed beef production pushed wholesale ground beef prices to record levels in 2024.
International Beef and Cattle Trade
Higher U.S. prices and a generally strong dollar have been headwinds for beef exports in 2024. However, beef exports are showing some strength in the second half of the year. Beef exports for the first nine months of the year were down 2.9 percent, after decreasing by 14.3 percent year over year in 2023. Beef exports remain weak to China/Hong Kong, South Korea and Canada but are recovering in Mexico, Japan and Taiwan.
Beef imports are up 21.1 percent year over year through September. Beef imports are led by Canada, followed closely by Australia, along with Brazil, New Zealand and Mexico. However, beef imports from Mexico are down from last year, the only decrease among major sources of U.S. beef imports.
Cattle Prices
Cattle prices continued to advance in 2024. Prices for calves have averaged about 20 percent higher year over year, while feeder cattle prices are roughly 15 percent higher. Fed cattle prices have averaged over six percent higher compared to last year.
What’s Ahead in 2025
Low cattle inventories and tight supplies will continue to dominate cattle and beef markets in the coming year. Total cattle inventories are expected to be smaller going into 2025. Despite reduced beef cow slaughter in 2024, limited inventories of beef replacement heifers are expected to result in a smaller beef cow herd in 2025. Potential for any herd rebuilding in 2025 is limited as the supply of replacement heifers going into the year remains tight. Beef production is expected to decrease roughly four percent year over year with feedlot inventories falling to reflect tighter supplies of feeder cattle.
Drought is still a threat in late 2024 and could extend into 2025. This and other reasons are holding producers back from any noticeable attempts to begin herd rebuilding. Cattle prices are expected to increase to new record levels but producers have not yet responded with increased heifer retention. If producers begin retaining heifers for breeding in 2025, cattle prices will advance faster and farther.
While the outlook for cattle prices is bullish and higher average prices are expected, volatility will remain high, and prices are subject to short-term setbacks. Both domestic and international markets are subject to considerable macroeconomic and political volatility. Producers should use risk management tools, such as futures options or Livestock Risk Protection (LRP), to protect marketing windows.
