Improved wheat pasture prospects and declining cattle numbers are adding demand for calves and feeder cattle. Surging post-election equity markets have strengthened market underpinning.

“Weekly cattle prices have rebounded from September’s relative lows to establish new highs for October and November,” according to analysts with USDA’s Economic Research Service (ERS), in the November Livestock, Dairy and Poultry Outlook. “They are forecast to continue elevated through 2025, reflecting recent price data and changes to the timing of cattle placements and marketings.”

Compared to the previous month’s projections, ERS projected prices $1 higher in the fourth quarter at $254/cwt. for an annual average price of $250.84, which was 25¢ more than the previous month’s estimate. Prices are basis feeder steers weighing 750-800 lbs., selling at Oklahoma City,

For 2025, ERS left projected feeder steer prices steady in the first quarter at $248. Forecast prices increased $3 in the second quarter to $257 but decreased $3 in the third quarter to $260 for an annual average price of $258, which was 75¢ less than the prior month’s estimate.

Similarly, ERS raised the expected five-area direct fed steer price for the remainder of this year and next, in the November World Agricultural Supply and Demand Estimates (WASDE). That was based on recent prices and the continued strength in beef demand. 

Forecast five-area direct fed steer prices increased $2 in the fourth quarter of this year to $188/cwt. with this year’s annual average price up 50¢ at $186.68. The ERS projected prices in the first three quarters of 2025 $1 higher at $188, $187 and $186, respectively. The forecast 2025 average price also rose $1 to $188.

Increased prices came with expectations for additional beef production.

Compared to the previous month, projected beef production for this year rose by 25 million pounds to 27.02 billion pounds. Beef production increased with higher dressed weights and cow slaughter more than offsetting lower expected steer and heifer slaughter.

Forecast beef production for 2025 of 26.3 billion pounds was 355 million pounds more (+1.4%) than the previous month’s estimate. It would be 745 million pounds less (-2.8%) than this year’s projected production. Estimated beef production rose on heavier expected dressed weights and higher expected steer and heifer slaughter, partially stemming from higher-than-previously-expected placements during the second half of 2024.

Border closure adds uncertainty

Temporary suspension of live cattle imports from Mexico to the U.S. in late November — due to detection on New World Screwworm in the southern Mexico state of Chiapas — added and element of price support.

“Roughly 5% of feedlot placements this year have been imported feeder cattle from Mexico,” explain Extension livestock economists in a recent Cattle Market Notes Weekly. “The fall months are a seasonally high import period. If the ban on imports of feeder cattle lasts awhile, it would mean a lower supply of feeder cattle going into feedlots. Tight feeder cattle supplies would get tighter which would mean more support for prices.”

Unknowns, according to the economists, include if and where additional cases are identified, duration of the import restriction and whether the ban will continue to affect all imported cattle from Mexico or only those from specific regions.

U.S. beef exports increase

U.S. beef exports also continue providing support. 

Exports of U.S. beef totaled 103,980 metric tons (mt) in September, up 5% year-over-year, while export value climbed 6% to $843.8 million, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). January-September exports increased 5% in value to $7.82 billion, despite volume falling 2% to 960,814 mt.

With the exception of China/Hong Kong, September beef exports trended higher year over year in all major Asian markets, while demand remained strong in Mexico and shipments to Central America were the largest in 18 months.

“The tourism rebound in Asia has certainly provided momentum for U.S. beef, especially in Japan, Taiwan and Korea,” according to Dan Halstrom, USMEF president and CEO. “We also saw impressive growth in the Philippines and Indonesia, which are markets where we see a lot of untapped growth potential.”

Beef export value equated to $412.52 per head of fed slaughter in September, up 3% from a year ago. The January-September average was $414.62 per head, up 5%.

For broader perspective, U.S. pork exports in September of 238,047 mt were 8% more year over year, while value increased 6% to $685.1 million. Through the first three quarters of the year, pork exports were 5% above last year’s pace at 2.23 million mt, with value up 7% to $6.36 billion.

No signs of herd xxpansion

Meanwhile, heifer slaughter data continues pointing to scant retention, if any, for herd expansion.

In fact, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University says the percentage of heifers comprising the mix of total cattle slaughter this year will likely be the highest since 2004.

“Heifer retention usually lags changes in cow culling,” Peel explained in his late-November market comments. “Herd expansion results in decreased heifer slaughter rates, similar to the 1991-1996 and the 2014-2017 periods. Current heifer slaughter rates suggest that the beef cow herd has continued to decrease in 2024 and that prospects for herd expansion in 2025 are very limited.”

Likewise, although less year over year, Peel says cow slaughter continues at a non-expansion pace.

“Declining cull cow rates are often the leading indicator of producer herd rebuilding intentions,” according to Peel. “Beef cow slaughter is down 17.9% year over year in the first 45 weeks of 2024. This is projected to result in an annual culling rate of about 10%, roughly equal to the long-term average and down from the recent high over 13% in 2022. During herd expansion the cow culling rate typically drops below 9% for 3-4 years.”

Although bred cow prices are higher year over year, Rob Ziegler, Extension specialist at the University of Wyoming says the increase is likely due to supply and higher cattle prices rather than expansion demand.

In a recent issue of In the Cattle Markets, Ziegler explains the October Cattle on Feed report pegged heifers at 40% of the total cattle on feed, whereas consensus suggests the number needs to be 36-37% to signal herd expansion.