Cattle futures surged on Friday and pushed to the upper end of their weekly range. February live cattle traded $2.75 higher to close at $231.15 per cwt. Prices finished $1.25 higher this week but continued to face overhead resistance below the October selloff gap.
March feeders rallied $4.80 higher on Friday to close at $339.40. Traders were heavy buyers ahead of this afternoon’s USDA report, which continues to suggest tighter feeder cattle supplies. Feeder cattle auctions brought willing buyers this week. The CME Feeder Cattle Index pushed to $350 per cwt for the first time since late October.
The USDA released its December Cattle on Feed report on Friday. The Dec. 1 feedlot inventory totaled 11.727 million head, down 2.1 percent year-over-year. The inventory was slightly lower than market expectations, as well as the lowest since 2017.
Feedlot placements were lighter than expected this month, with November placements falling 11.2 percent from a year ago to 1.595 million head. That was also the lowest November print since the USDA began reporting the data in 1996. Lower placements in Arizona, Colorado, Kansas, and Texas drove the decline.
Feedlot placements have been hit hard, particularly in the south, due to the Mexico border closure. A short-term reopening allowed cattle flow into the U.S. earlier this year before screwworm was detected closer to the U.S.-Mexico border, causing a reclosure. Feeder cattle imports for the first eight months of this year reached 324,653 head, sitting 69 percent lower than the same period last year.
Fed cattle marketings totaled 1.521 million head in November, down 11.8 percent from last year and the lowest since 2014.
Total beef supplies declining
Declining feedlot supplies have driven lower production, with output totaling 26 billion pounds, the lowest since 2017. Despite declining production, total U.S. beef supplies are expected to remain relatively flat between the next couple of years, largely due to imports. For the 2025 calendar year, the total U.S. beef supply is forecast at 31.96 billion pounds, 1 percent lower than a year ago. Supplies are forecast to decline another half a percent in 2026 to 31.84 billion pounds.
Imports will represent a record 16.7 percent of total beef supplies in 2025. That share is expected to grow to another record of 17.1 percent following the Trump administration’s tariff reduction on beef imports this month.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.