2025 Cattle Market Outlook
DR. ANDREW P. GRIFFITH
KNOXVILLE, TENNESSEE
As time progresses, cattle markets seem to do the same thing over and over, but they keep finding new ways to disguise their actions. It was certainly an exciting year in the cattle markets in 2024, but 2025 likely has just as much excitement in store. At this point in the game, there is no way to know what will transpire in the new marketing year other than uncertainty will result in volatile markets. What is known is the calf crop will be smaller than the previous year, which will support calf prices. The uncertainty is how much support will it provide.
A good place to start when attempting to project prices is to look at recent history. Figure 1 contains 550 to 600 pound steer prices in Tennessee from 2022 through November 2024. The steadiest prices and the lowest prices occurred in 2022. Prices escalated quickly in 2023 when it was becoming clear that fewer cows were in the breeding herd. Prices continued to increase in early 2024 due to dry conditions in 2023 that resulted in reduced heifer retention and increased beef cow slaughter. These same dry conditions persisted in many parts of cattle producing country in 2024, which resulted in sending the market some mixed signals as it relates to prices. The continued high quantity of cattle on feed and increased beef production from slaughtering heavier cattle depressed cattle prices for a few weeks in late summer and early fall. However, as fall progressed and the calendar turned to December, cattle prices in the cash market and on the futures market found strength.
The nuts and bolts of the market from the supply side is the beef cow herd will be smaller in 2025 than in 2024 despite reduced beef cow slaughter. Additionally, fewer heifers will have been retained to be beef cow replacements, which all means the calf crop will be smaller. Will the smaller quantity of cattle result in higher prices, or has the market already priced in the reduced supply? At the same time, markets could be influenced by the change in presidential administrations as President Trump is expected to continue his previous work on trade relationships. His tariff policies could certainly result in retaliatory efforts from major trading partners in the short run. The longer run impact is less certain.
After considering historical and current prices, the futures market is the next best source of information. Some may say this is the best source of information for where cattle prices are expected to be at a certain point in time, but volatility in the futures market is too high to consider it a great indicator of what the price will be. For instance, the January 2025 feeder cattle contract has traded in a $50 per hundredweight range over the past 11 months, which is a $400 per head swing in 800 pound steer values.
Taking a closer look at feeder cattle futures contracts for 2025, there is only a $5 per hundredweight trading range across the nine contract months at the time of this writing. This is an extremely tight range across a full year of trading feeder cattle. This is difficult to fathom because the CME feeder cattle index traded in a $36 per hundredweight trading range in 2024, $77 range in 2023, and a $31 range in 2022. Additionally, many of the contract months saw price swings of approximately $15 per hundredweight in the four weeks prior to this writing. Thus, there is likely to be a wide range of cattle prices again in 2025.
Though prices may have a wide range over the next 12 months, prices are expected to be higher in 2025. The CME feeder cattle index averaged approximately $250 per hundredweight in 2024. A feasible average in 2025 is between $255 and $265. As it relates to calf prices in Tennessee, 550 to 600 pound steers averaged just shy of $270 per hundredweight in 2024. A likely range for a yearly average is $270 to $285. ∆
DR. ANDREW P. GRIFFITH: University of Tennessee