When the Herd Vanishes: Why Feeder Cattle Futures Are Charging Ahead
In a market where the loudest sound is usually the stampede, it’s the silence of empty pastures that’s moving prices. Over the past three months, CME Feeder Cattle Futures (GF) have surged 14.3%—not from exuberance, but from scarcity and a cascade of supply chain tremors.
The Anatomy of an American Shortfall
Start with this: as of July 2025, the U.S. beef cow inventory has shrunk to 27.86 million head, marking the lowest count since 1962. The total U.S. cattle herd stands at 86.7 million, down 1% year-over-year—a 73-year nadir. National weekly feeder and stocker cattle receipts are down 7.6% from last year, and heifer sales are at their weakest since the contraction crisis of 2011-13. In the world of cattle, that’s not a blip—it’s a seismic shift.
Drought: The Relentless Sculptor
Behind the numbers lurks drought, the invisible hand reworking America’s beef map. Over 60% of U.S. cattle reside in drought-affected counties. In Missouri and Nebraska—two top beef states—up to half of June pastureland is rated poor or very poor, the worst in decades. The result: ranchers are forced to cull herds, haul hay across state lines, and postpone rebuilding until at least 2026. Supply isn’t just tight—it’s in a vice.
Feed—Neither Feast Nor Famine
Feed costs, often a wild card, have played a curious part. Corn prices, while modestly higher ($4.35/bu in February, up 10 cents month-over-month), remain well below their 2022 peaks. The impact? Margins are volatile, but not yet destructive. Still, the feedlot margin see-sawed from +$77/head to $325/head earlier in 2025, before retreating to $129/head in June. With cattle numbers constrained, feed costs have become the lever, not the anvil.
Boxed Beef and the Appetite That Won’t Quit
Record prices haven’t deterred American carnivores. Retail beef sales topped $40 billion—55% of all fresh meat—while the CPI beef and veal index climbed 2.5% year-over-year. In Oklahoma, 500-lb steers fetched $471/cwt in early September, up 55% year-over-year. Choice boxed beef sits at $413.60/cwt, up 33%—proving that tight supply and undiminished demand can co-exist, at least for now.
Exports, Imports, and the Global Chessboard
As domestic herds dwindle, the U.S. is importing more beef than ever—projected at 5.27 billion pounds in 2025, up nearly 14%. Imports from Brazil have soared 72%, while Australia’s shipments are up 20%. Exports remain robust, but a strong dollar and new tariffs threaten to squeeze margins. It’s a global game of protein musical chairs, and every move ripples back to feeder cattle prices at home.
Hedging, Hoarding, and the New Cattle Arithmetic
Producers aren’t rushing to rebuild. Heifer retention is still depressed, and the cost of borrowing has jumped 43% year-over-year, courtesy of a stubbornly high Fed rate (5.25–5.50%). The calculus is simple: why expand now, when margins are uncertain and the next drought could be a single weather front away?
What the Tape is Telling Us
Feeder cattle futures (GF) haven’t just climbed 14.3% in three months—they’re up 25.8% over six months and a stunning 48.4% year-on-year. Commercial traders remain net long, a rare consensus in a market known for its volatility. The technicals—50-day, 100-day, and 200-day moving averages—show powerful upward momentum, reflecting a supply story that’s far from over.
This Isn’t Your Grandfather’s Cattle Cycle
In previous cycles, high prices would entice rapid herd rebuilding. Not this time. The drought is chronic, financing is costly, and the very structure of the market is shifting—think beef-on-dairy calves, cross-breeding, and technology-driven efficiency. The old playbook is gathering dust while new rules are being written on the fly.
The Quiet Thunder: A Market Defined by Absence
The feeder cattle rally isn’t about exuberance. It’s about absence—the absence of grass, the absence of heifers, the absence of certainty. In a year when empty pastures say more than any analyst’s forecast, CME Feeder Cattle Futures are simply translating that silence into numbers. The market is listening. Are you?