Can someone explain to me why this makes sense? Chicago traders are driving the prices up based on fundamentals they don't seem to understand. Currently the market is over 50% spec traders when it's normally 20-30% spec traders.

How do people at the sale barns justify buying $300 losers when this market corrects? If the fundamentals say the cow heard is low, beef demand is high, but producers are producing more beef with less cattle, how can the price still be this high?

I've seen discords where Bitcoin bros in Sweden are trading cattle contracts. The markets is set to close at all time highs again today. It's hard for me to imagine who's long in this market other than the Bitcoin bros trading contracts.

This market feels like GameStop.

All I know is I'm not buying steaks and beef like I used to...the prices at HEB have literally become ridiculous. Fruits and Veggies aren't far behind, and Tylenol and Advil have become ridiculous as well! Eating healthy is almost cost prohibitive, no wonder so many people eat processed foods.

I know nothing about the cattle market, and I didn't sleep at a Holiday Inn last night. I just like eating steaks.

But what I do know, is that people about 3x removed from the production of the good are making all the money, and it's never for reasons that make sense to or benefit the consumer. Most of the time it feels like we are all just NPC's in someone else's game.

DVM97 said:

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All I know is I'm not buying steaks and beef like I used to...the prices at HEB have literally become ridiculous. Fruits and Veggies aren't far behind, and Tylenol and Advil have become ridiculous as well! Eating healthy is almost cost prohibitive, no wonder so many people eat processed foods.

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This is truth.

And insurance is a broken scam of a system, and our next generation of doctors are using AI to pass med school… so- we can't afford to get healthy, and we can't afford to get sick.

Forecasts don't show a correction any time soon. And cattle inventories, the lowest in decades, will stay that way for at least 2-3 years. My opinion...

Supply is low. Lowest amount of cattle since the 50's or 60's and we also aren't importing Mexican beef.

We import a significant amount of beef from Brazil and Argentina. I think about 15%. The tariffs do not help that given the supply issues.

Jbob04 said:

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Supply is low. Lowest amount of cattle since the 50's or 60's and we also aren't importing Mexican beef.

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The Screw Worm issue is for sure impacting cattle prices as well. I know zero about cattle trading or futures, but do know my S Texas friends that rely on Mexican cattle imports for business are taking it on the chin right now, and are losing even more $$ because cattle prices are at all time highs ($3/lb)

The primary reasons are:

1) The US herd size is the smallest its been in over 70 years.
2) Heifer retainment is still at very low levels, signaling the national herd likely wont be rebuilt any time soon. some estimates have 2-3 years to get back to a normal size.
3) With border shutdowns and tariffs, we are essentially not importing any cattle in right now.
4) Screwworm concerns that of the cattle we have, may have major issues if it spreads.
5) Demand hasnt fallen off a cliff.... yet.

Despite anecdotally people saying theyre buying less beef at the store, that's not shown up in the demand picture as seen by the prices for box beef cutouts. People are still going out and buying steaks, ground meat, etc. Time will tell how long that can hold up.


All that being said, it wouldnt surprise me if speculators have driven this market a further 40 cents per pound than what supply and demand fundamentals would indicate. Remember though, while producers are quick to blame speculators for crazy market movements, you need them for liquidity in markets.

Cattle prices will only go up as cattle numbers go down. The larger ranches are being sold resulting is less cattle land, and the younger generations want nothing to do with ranching and the work it entails. One day, Beef will be a true delicacy item.

I raise bison. Not a week goes by someone doesn't contacted me for animals

44mAG said:

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Cattle prices will only go up as cattle numbers go down. The larger ranches are being sold resulting is less cattle land, and the younger generations want nothing to do with ranching and the work it entails. One day, Beef will be a true delicacy item.

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Seeing a lot of friends with ranches (not in Texas) who are cutting way back on number of head of cattle and spending more time on elk hunts which pay much more for a lot less effort.

I sold nearly all of my ungulates to ranchers who had lost their asses for 20 years on cattle and sold out this year and needed something to put on their land to keep ag exemptions.

agfan2013 said:

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The primary reasons are:

1) The US herd size is the smallest its been in over 70 years.
2) Heifer retainment is still at very low levels, signaling the national herd likely wont be rebuilt any time soon. some estimates have 2-3 years to get back to a normal size.
3) With border shutdowns and tariffs, we essentially not importing any cattle in right now.
4) Screwworm concerns that of the cattle we have, may have major issues if it spreads.
5) Demand hasnt fallen off a cliff.... yet.

Despite anecdotally people saying theyre buying less beef at the store, that's not shown up in the demand picture as seen by the prices for box beef cutouts. People are still going out and buying steaks, ground meat, etc. Time will tell how long that can hold up.


All that being said, it wouldnt surprise me if speculators have driven this market a further 40 cents per pound than what supply and demand fundamentals would indicate. Remember though, while producers are quick to blame speculators for crazy market movements, you need them for liquidity in markets.

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This ignores the fact producers are making more beef with less cattle, and 2x the speculators in the market.

It took one screw worm rumor to limit down the market last Friday.

This market isn't built on fundamentals, it's built by speculators.

The market makers are trying to squeeze the shorts out of the market.

When this corrects, anyone using leverage and isn't hedged will lose it all.

I don't understand who would be long cattle right now in the spec market. Makes no sense.

At least the cow calf guys are making some money.

At least for now though, the end consumer of beef is "eating" the costs. So it's not entirely speculative IMO.

I helped a relative tag and vaccinate some heifers to be kept for replacements, and it was hard to do that when you knew that small group was worth $20,000 or so…but not all decisions are purely P&L based.

I sold a 650 lb heifer for just over $2,500.00 after fees. You can not afford to keep them for that price.

That's the Gods truth. It's nice to be able to put a little back instead of putting what you get right back in the pipeline. Can't put anymore on my acreage, so I'm not part of the herd reduction problem.

Talked to a local rancher the other day, he had been trying to buy replacement heifers but the feeder buyers kept outbidding him. His current strategy is to raise his own.
The rancher I help has already been keeping the top end of his heifers, just selling any with an attitude or lesser conformation.

If screwworms hit a bunch of producers are going to sell out which will tank the market short term, but long term will probably make today's prices look cheap.

Fixiing to sell 6 cows and 6 calves …. Gonna be a good sale !

Another factor that seldom gets brought up is the wildlife exemption. Land has been unaffordable for livestock guys for 20 plus years, but there was always an opportunity to lease ground from a "city" guy who came out and bought land and needed to keep the Ag exemption.

Now that the wildlife exemption is available, that land will never see livestock again.

Yes, producers have been able to squeeze more beef out of less cattle but that is reaching diminishing returns. Cattle frames can only get so large.

Last thing, it's pretty ironic seeing a vet complain about beef prices!

Luckass96 said:

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I sold a 650 lb heifer for just over $2,500.00 after fees. You can not afford to keep them for that price.

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A friend just told me that 7 weight steers were bring $5/lb! That's $3,500 for a weaned calf! Insane! I don't see this reflected at the meat counter, but it can't be far off, with serious repercussions. Imported beef will hafta be increased to satisfy demand. No other alternative.

BoerneGator said:

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Luckass96 said:

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I sold a 650 lb heifer for just over $2,500.00 after fees. You can not afford to keep them for that price.

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A friend just told me that 7 weight steers were bring $5/lb! That's $3,500 for a weaned calf! Insane! I don't see this reflected at the meat counter, but it can't be far off, with serious repercussions. Imported beef will hafta be increased to satisfy demand. No other alternative.

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I haven't seen any go close to $5 in Texas, but plenty of 7 weights selling $3.50 plus.

Think this might have been a special sale for "backgrounded" steers. Not at a weekly sale barn. But still....$3.50 is still 10x what they brought back in the 80's. Mostly inflation, as the cost/price of everything has skyrocketed! No one's getting rich.

The hamburger I used to pay .35 for is now $6-7. Haircuts were $1, and are now $20.

there's a monopoly, or more like an oligarchy, on the meat processing plants and feed lots.

A rancher has calfs born on a small ranch, they then send them to a feedlot, the feedlot finances all the feed, growth hormones, etc. to the rancher (acts like a bank).

Feedlot sales to the processor, processor pays feedlot, feedlot gives rancher his share if anything left otherwise they just roll it into other cattle in the lot. There are multiple layers of profit, much of what is controlled by large corporations (Tyson, Cargill, JBS).

Shouldn't be a surprise to anyone, but there's been vertical integration M&A and breakups in the industry in the last 5 years. JBS owned Fives RIvers and sold to Pinnacle a few years ago. Private Equity is involved. Squeeze margins, build a moat around the product and process, return capital to investors.

Consumers and cattle ranchers are the ones getting squeezed.

Just because beef prices are going up (Processors sell to the grocer who sells to us) doesn't mean the cattle growers are doing any better.

I only have a very small cow calf herd of about 20 but with beef prices up I have been trying to figure out a way to manage a larger cow calf herd on my land. I thought maybe the whole mob grazing method of rotational would work but after attending the Beef Cattle classes a couple weeks ago I'm not thinking that will really work.

My north Texas ranch is split with 63 low fence acres for cows and 270 high fence for whitetail and exotics (currently just Oryx).
I have avoided putting the cows in the high fence cause I don't want to put cross fences in and also don't want the ponds screwed up. So unless I can figure out a way to increase cow calf density on lightly improved acres I'm stuck at 20 head.

The simple AND easy answer is to buy more land and cattle!

Either that or find some land to "lease" in your area & put your heifer calves on it to raise them to be momas.

Luckass96 said:

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I sold a 650 lb heifer for just over $2,500.00 after fees. You can not afford to keep them for that price.

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In Giddings yesterday, I sold a 245 and 295 bull calves at 5.90 and 5.95, 5 cents off of the high for that class.

I have several purebred heifers that I was going to keep back or sell off of the farm as replacements but they are still 4 months away from that and based on yesterday's prices that would put them in the 2K range..

Since you mentioned Giddings Livestock..

will.mcg said:

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The simple AND easy answer is to buy more land and cattle!

Either that or find some land to "lease" in your area & put your heifer calves on it to raise them to be momas.

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Here lies the crux. I'd love to buy more land but all the people moving into the state is driving prices to insane level. I paid $10k/acre 1 year ago and it's already up 50-60% this year and set to triple at a minimum in another 3 years. I simply can't afford to buy more land at this point. It's getting insane.
And no one is leasing around me anymore or if they are it's crazy high to a point it would be impossible to ever turn a profit.

I've been in the habit of splitting a youth show steer every year at the county fair and I rarely go into a grocery store so I've not seen the rise in beef prices. The other day we were short on time so I asked my wife to grab some steak from the store, I almost choked when she told me the price. We did chicken that night instead

We've cut way back on beef consumption; the prices are just stupid, and won't be getting any better anytime soon. $0.99/lb chicken thighs at HEB are tough to beat.

So what does the future hold? With folks retaining heifers to me prices will at least be sustained for another 2 years.

It will stay like this for two more years, minimum. And that's assuming the drought in the west and southwest breaks now. So it's going to be more like 3-4 years, if ever.

Spore Ag said:

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So what does the future hold? With folks retaining heifers to me prices will at least be sustained for another 2 years.

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Crazy thing is the retention of heifers for replacements really isn't bearing out in the numbers yet although it is coming (We began earlier this summer).

I think we continue to see:

• a decreasing herd size, particularly if screwworms make into the US
• Leveling off of the kill size which would correlate to a leveling off of total beef production
• continued high prices (at least perceived - prices are that high relative to input cost)

The supply side for beef is constrained and won't get better anytime soon. The move will have to come from the demand side. The beef industry has done a good job of separating itself over the last 25 years from the other proteins as a superior/luxury type product. Ground beef is seeing some downward pressure, but the primal cuts are holding in both price and demand.

Have you seem consolidation with hedge fund investment? McDonald's will still want $6 (whatever) hamburgers. Wall-mark investing in the beef industry.