Cattle prices hit record-high levels to start 2025 — and prices could stay strong for a while.
LaMonte, Mo., cow-calf producer Pat Wood recently sold his calves for some eye-popping prices.
He says he’s never seen anything like it in the 50 years he’s been raising cattle.
“My last year of 4-H, I got grand champion steer at Pettis County and sold it for 50¢ ... I think it was 55¢ or 57¢ a pound. After the sale was over, people came up to me and said you’ll never see that again. Now prices are over three bucks a pound,” he says.
The record prices are a result of historically tight supplies confirmed in USDA’ s Cattle Inventory Report.
It showed total numbers down nearly a half million head from last year at 86.7 million, the smallest inventory in nearly 65 years.
Dave Weaber, senior animal protein analyst with Terrain, says the cow herd is even tighter at a 75-year low, with little evidence of rebuilding or heifer retention.
“Really there was no growth in many of the top 10 cow states and on the beef side, total inventory was down about 150 ,000 cows, which we expected given where cow slaughter is, down 18% for the year. We just didn’t put any heifers back in the top of the system last year. They’re actually all going through slaughter right now,” he says.
Kevin Good, vice president of industry relations and analysis with CattleFax, agrees there’s no evidence of female retention yet.
“We’re starting to see a plateau, so it would suggest your beef cow herd is at the bottom end of the cycle,” he explains.
So why has the herd rebuild been so slow, especially compared with the last bull market in 2014/15?
“Even though moisture conditions last year were better than the three previous years, by no means are they great, and the weather forecast suggests we’re still in the La Nina weather pattern,” Good adds.
Buck Wehrbein, president-elect of NCBA, has been in the cattle business 45 years and runs a 30,000-head feedlot in Nebraska.
He agrees with Good: “As people pay down debt and so forth they can afford to keep a heifer rather than turn her into cash and pay down debt. Some of these people, if they’re old enough, maybe they don’t want to rebuild.”
That means the cattle cycle hasn’t reached the tightest numbers yet, which could continue through 2026 and 2027.
But it’s not just supply that’s driving the record market. Strong export demand in 2024 helped with a surge in business in southeast Asia.
“We’re running about 5% or 6% up right now through 11 months,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation, in regard to business with southeast Asia. “Our estimate is that we’re going to come in around $10.5 billion in sales globally, which should be our second highest year ever.”
Plus, U.S. consumers haven’t experienced sticker shock from higher beef prices, according to Weaber.
“2024 was an absolutely fantastic year for beef demand. On an index basis we’re up about 4.4 % for the year. Real per capita deflated spending is actually up 5 % for the year,” he says.
So how many more cattle are needed to meet consumer demand? Weaber says it’s going to take 30.3 million cows, or 2.5 million more, than we have today.
It would be even more without the heavier weights.
“Last year we had a record one-year increase at 26 lb. That offset basically a million head of harvest cattle,” he explains.
Needless to say, the outlook is still for more record prices in 2025 as CattleFax released its annual projections at CattleCon.
“We have the calf market this year averaging closer to $3.30 to $3.40 for a steer calf. That contrasts to $3.10 last year,” Good says. “If we went to a yearling 750 weight steer average, that would be about $270 this year versus $248 last year. Take that to the fed value this year and it would suggest a $198 average compared to $186 average last year.”
Marshall Hansen, senior vice president of the corporate protein team with Farm Credit, says the good news is the cow-calf sector is seeing real profitability and feedlots are also making money even with high-break evens.
“I’m sure we have a lot of people who are seeing brea-evens over $2 for fat cattle for 2025, which are highly elevated levels and some of the highest break-even levels we’ve probably ever seen in the industry,” Hansen says.
That’s making risk management more important than ever, says Stephanie Lunden, commercial livestock insurance agent, Farm Credit Services of America.
“There’s too many dollars out there to have nothing on board, which is where LRP really comes into play with setting that price so you have that protected downside to keep and still participate in the upside,” he explains.
And hopefully that upside will last for a while.
