Cattle and beef prices hit the stratosphere

When it comes to the cattle market at the beginning of 2024, there’s good news . . . and then there’s more good news.

Record prices for all classes of cattle are being paid right now, and there will almost certainly be new record average prices for all of 2024. That’s according to the cattle market experts at CattleFax, an outlook firm that specializes in meat markets. They presented their latest report at the National Cattle Convention in Florida this week.

In fact, CattleFax thinks these good times in cattle markets could go on for a while, maybe for the next three or four years, as ranchers rebuild cow herds to match beef demand. 

Here’s the price outlook CattleFax presented for 2024 by class of cattle.

• Fed steers: These are the finished animals, ready for harvest. They will average $184/cwt, up $9 from 2023.
• Feeder steers (800 pounds): These are the animals ready to go into a feedlot for final finishing. They will average $240/cwt, up $20 from last year.
• Steer calves (550 pounds): These are the recently weaned calves, usually headed for a stocker grazing operation before they head to the feedlot. They will average $290/cwt, up $28 from last year. 
• Utility cows: These are culls, and usually go for hamburger meat. They will average $115/cwt, up $16 from last year.

Why are cattle prices so high?

The biggest reason is that cattle numbers have been on the decline for the last few years, mostly due to drought in the cattle-heavy Plains states. While drought declined in some areas last year, it didn’t everywhere. CattleFax reports that half of all beef cows were in dry weather or a full-fledged drought area last year. Some still are, and it’s limiting the ability for many producers to go into expansion mode.

The USDA cattle inventory report just released this week confirmed the continued liquidation of cows over the past year. Total cattle numbers were down 2% from one year ago, to 28 million head. Many expect the inventory number to drop again in the coming year. In fact, Randy Blach, the CattleFax CEO, thinks the peak cattle prices of this cycle may come in 2026.

Another reason for high cattle prices comes from the demand side. People still love their beef, and these premium prices have not slowed that demand yet. Retail beef prices averaged a record $7.90 last year, for all classes of meat.

That high retail price may be one reason for caution on cattle going forward. Both pork and poultry supplies are expanding this year by small amounts, and their average retail prices are only about half that of beef. At some point, the experts think, consumers could turn more strongly to those alternative meats.

For producers who are thinking about expanding their cow herds to capitalize on these good prices, CattleFax says now is the time. It takes more than two years to raise a replacement heifer and get a calf out of her to get the full effect of these markets. Mike Murphy of CattleFax says that bred heifers are now selling for about $2,400. But if that cow stays productive for five or six years, that price will have been a $1,000 or more bargain over her lifetime.