Despite a general risk-off theme to start February in surrounding markets -- cattle traders are finding comfort in the U.S Jan. 1 Cattle Inventory report released after the close on Friday.
With beef cow numbers falling 284,800 head while beef heifers retained for breeding only increased 41,700 head, the rebuilding of the herd has clearly not started.
One of the most important factors to keep in mind (due to the length of the breeding cycle) is that this result was set in stone prior to the unfortunate events that unfolded after Oct. 16. With no meaningful increase in supply or reduction in demand coming from all of the White House attempts to lower beef prices, all that resulted was shaken confidence in those responsible for ultimately rebuilding the herd.
Given Friday's report, it should be safe to say that it will be very important for there not to be a repeat of the fall efforts to lower prices. The market and the administration will need to build confidence back up to ensure ranchers (and the lenders that back them) do take on the risk of rebuilding.
As it is, this will ensure tight beef supplies for a few years to come. And Friday's commitments of traders report shows that as of Jan. 27, managed money traders were holding 51,224 less net long live cattle futures and options contracts than they were at the high in 2025. In feeder cattle, their net long was 21,177 contracts below the 2025 high (being a less liquid market). Both suggesting there is plenty of room for that group to push prices into record territory again.
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With beef cow numbers falling 284,800 head while beef heifers retained for breeding only increased 41,700 head, the rebuilding of the herd has clearly not started.
One of the most important factors to keep in mind (due to the length of the breeding cycle) is that this result was set in stone prior to the unfortunate events that unfolded after Oct. 16. With no meaningful increase in supply or reduction in demand coming from all of the White House attempts to lower beef prices, all that resulted was shaken confidence in those responsible for ultimately rebuilding the herd.
Given Friday's report, it should be safe to say that it will be very important for there not to be a repeat of the fall efforts to lower prices. The market and the administration will need to build confidence back up to ensure ranchers (and the lenders that back them) do take on the risk of rebuilding.
As it is, this will ensure tight beef supplies for a few years to come. And Friday's commitments of traders report shows that as of Jan. 27, managed money traders were holding 51,224 less net long live cattle futures and options contracts than they were at the high in 2025. In feeder cattle, their net long was 21,177 contracts below the 2025 high (being a less liquid market). Both suggesting there is plenty of room for that group to push prices into record territory again.
?