Dennis Sun: Cattle and Beef Prices Expected to Rise

Today, everything we read about cattle and beef say prices are going up. This can be attributed to the short supply of cattle and the high demand of consumers, both in America and around the world. Everyone wants American beef.

The weekly CattleFax update, dated Jan.17, says, “The fed cattle market has surged higher, clipping the $200 hundredweight (cwt) mark for the first time on a U.S. average basis. The market has more than doubled in less than five years from the COVID-19 lows of $95 cwt in early July 2020.”

“The price strength has been driven by tightening fed cattle supplies amidst continued beef demand strength. Higher fed cattle prices will send the market signal to ration tighter cattle and beef supplies by pushing wholesale and retail prices higher as well. While all dollars flow from the consumer in the long run, supply-side forces can often prevail in the short or intermediate term,” CattleFax continues.

“As a result of crossing the psychologically important $200 level, packers, wholesalers and retailers will adjust prices higher. Ebbs and flows in beef prices will still occur, especially for the cutout, but the downside risk is likely more limited. The spot composite cutout above $330 has already eclipsed the high from 2024. Expect strong support in the $300 to $310 area compared to a cutout which spent 15 weeks below $300 in 2024. After an expected near-term pullback, odds favor a spring cutout rally exceeding current levels,” CattleFax adds.

These three paragraphs summarize the cattle and beef industry today. Last week, the federally-inspected number of fat or fed cattle processed was 589,000 in the U.S. A year ago, the number was 545,000. Most all of the cattle being processed today have a higher dressed weight than a year ago, so this helps with tonnage of beef sold.

Also, live cattle futures continued their bullish path of least resistance in early 2025, reaching a new record high of $1.99 per pound in late January 2025.

Some consumers are eating organ meats – liver, tongue and heart. These meats have always sold well to ethnic groups and in places like the Middle East, Korea and Russia. Organ meats are advertised as healthier because they contain all of the essential vitamins and micronutrients. One advertisement said these meats were nature’s multivitamins.

I’m not sure if this is true, but it’s out there. So now we should eat heart meats to improve our own. And, beef processing plants are finding organ meats can be marketed as value-added instead of going into certain hotdogs.