Call the Market

With the end of the year upon us, I've been looking back through some of my charts and am baffled by just how tight a trading window the feeder cattle market moved within this past year.

Everyone knows this past year the cattle market reached record-high prices -- record high prices for fed cattle, feeder cattle and even cull cows -- but through the excitement and market chatter, we may have missed just how powerful the market's stamina really was. Throughout this past year, except for a brief period in January, the CME Feeder Cattle Index traded in a tight window of $240 to $262. Strong, relentless markets aren't easily shaken and don't panic or change direction on a whim and given that the index only varied by a mere $22 throughout the last year, that's evidence of just how bold and prevailing the market truly was.

It would be remiss of me to overlook some of the challenges that plagued the market this past year. This spring, the live cattle contracts dropped $11.85 amid the HPAI outbreak and didn't recover that lost position for nearly a month. Then, the market was rattled by the equity market meltdown that occurred early in August, causing the live cattle contracts to fall $22.98, and they didn't fully recover that lost position for nearly four months.

And, last but certainly not least, the market had to tactfully dance around pre-election jitters throughout the entire year. But even so, as the feeder cattle complex watched and witnessed the live cattle market anxiously trade throughout much of this past year, the feeder cattle market remained committed, focused and steadfast in its direction -- which is truly incredible.

Another part of this fascinating market anomaly I think needs highlighted is the fact that never before in the feeder cattle market's history has the complex so boldly traded at these levels. During the last cattle cycle's peak back in 2014, the CME Feeder Cattle Index reached $240 but was only able to maintain that level for a short two months -- let alone a whole year like the market did in 2024.

I remain both bullish and excited for the upcoming 2025 calendar year, as I believe the market's leverage will continue to favor grassroot cow-calf producers. The Cattle Inventory report, which is shared at the end of January each year, is expected to once again showcase an even lower number of beef cows compared to the 2024 reports, when the industry carved out a new all-time low for the cowherd at 28.2 million head. With supplies of feeder cattle guaranteed to be limited, so long as demand from beef consumers remains strong, the market stands an exceptional chance of having another momentous year.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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