The cattle market is experiencing a period of constrained supplies, a trend expected to persist in the coming years due to challenges posed by drought and elevated input prices, limiting opportunities for herd expansion.
This reduction in herd size coincides with robust demand for beef, propelling cattle prices to higher levels. Since hitting a low point in the spring of 2020 near $76 per hundredweight (cwt), front-month live cattle futures prices have more than doubled, reaching $190 in the Fall of 2023. Since the October peak, prices have dropped approximately 12%. A similar upward trajectory was observed in feeder cattle futures values over the same period. The inherent biological processes involved in cattle farming dictate that it will take several years for inventories to reach their nadir and for herd expansion to commence, marking the completion of the cattle cycle.
