Cattle Futures Surge: Near-Term Uptrend Seen

Cattle futures markets are exhibiting a strong near-term uptrend, with February live cattle futures climbing to a four-week peak and January feeder cattle futures consolidating after a six-week high. These gains are underpinned by improving fundamentals in both cash cattle and boxed beef markets. Last week, average cash cattle trade reached $221.21 per hundredweight, a notable increase from the previous week.

The resilience of U.S. consumer demand for beef, particularly for holiday meals, is a key factor supporting cattle prices. Additionally, recent wintry weather in the U.S. Plains states is stressing livestock, a condition that typically benefits futures prices. Increasing cattle carcass weights, which reached an all-time high of 960 pounds last week, and a rise in high-quality beef grades are also contributing to market strength.

Farm Bureau economist Bernt Nelson highlighted that tight cattle supplies are likely to continue through 2026, delaying herd expansion. Farmers face incentives to market cattle rather than retain heifers for breeding due to record input costs, despite potential herd expansion opportunities in 2028. These supply dynamics are expected to maintain a floor under cash cattle prices and support wholesale boxed beef values.