Howdy folks,
Today, I’ve got my eyes on cattle prices, which are shaping up to be a key story in 2025.
So far this year, live cattle futures are up 3.23%, and feeder cattle futures are up 2.17%.
That might not sound like much, but when you combine it with the broader context of the beef market, it’s clear we’re seeing some major shifts.
What’s Driving the Spike in Beef Prices?
The big news here is that the U.S. has halted cattle imports from Mexico due to the screwworm.
This parasitic fly has been spotted in South and Central American countries, and it’s a major concern for the health of cattle.
It’s good that we’re protecting U.S. consumers, but by cutting off imports from Mexico, we’ve put even more pressure on an already strained domestic beef supply.
With beef prices already sky-high, this could be the straw that breaks the camel’s back for many consumers.
How Will This Play Out?
Here’s what I think: At some point, prices are going to get so high that people stop buying beef.
It’s basic economics — when demand dries up because the price becomes unbearable, the market adjusts.
Beef prices will eventually come down, but we could see some real sticker shock before that happens.
The Egg Factor
But it’s not just beef that’s hitting wallets right now. Egg prices have been through the roof because over 17 million chickens have been culled due to bird flu outbreaks.
With egg production down 4% from last year, it’s no wonder breakfast is getting more expensive.
High prices for staples like beef and eggs are the kind of thing that can ripple through the broader economy.
When consumers cut back on these essentials, it often signals that they’re feeling the pinch across the board.
What to Watch
For now, keep an eye on those live cattle and feeder cattle futures, and pay attention to consumer sentiment around these high prices.
Are people switching to alternative proteins like pork, chicken or fish? Are restaurants and grocers adjusting their menus and pricing strategies? These are the signs that could point to the next phase of the story.
I’ll keep watching this closely and let you know what’s next.
Until then, stay sharp out there.
— Geof Smith
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