By Larry Stalcup Contributing Editor

Robust cattle prices are forecast for 2025 – but don’t overlook market barriers that may nullify a nice profit, caution two university beef cattle economists with keen eyes on prices.

From average calf prices ranging from $300 to $340/cwt., to fed markets in the $190 to $200/cwt. range, Colorado State University’s (CSU) Stephen Koontz and Texas A&M University’s (TAMU) David Anderson urge producers and feeders to measure the impact of tight supplies, input costs, demand and drought heading into the new year.

“I think there is room for fed prices to increase,” Anderson tells CALF News. “We should expect that growing drought conditions will impact the willingness of ranchers to expand herds.”
Koontz believes herd expansion is coming but, due to a projected La Niña yielding dry winter weather, not until next fall and more in 2026.

500- to 600-lb. Calf Price Projections

Koontz, CSU Extension livestock economist, bases his forecasts on much of those from the Livestock Marketing Information Center. For 500- to 600-lb. calves, his first-quarter projections are $310 to $315/cwt., second quarter $325 to $340, third quarter $310 to $315 and fourth quarter $300 to $310.

“Persistent tight supplies and strong demand in the spring should enhance calf prices in that period,” he says, examining his high second-quarter projections.

“The big reason for higher prices across all weights is tighter supplies,” says Anderson, TAMU AgriLife Extension economist. “A smaller cow herd means fewer calves.” He pegs his first-quarter calf price to average $300/cwt. For the second quarter, he forecasts a $305 average price, third quarter $300 and fourth quarter $300.

“If we were to start to see rapid herd rebuilding, then prices would increase even more due to the lack of heifers on the market,” Anderson says. “Fewer calves for sale boosts prices for 2025. It’s likely that we need higher prices to get ranchers to increase herds.”

700- to 800-lb. Feeder Projections

“I think this is much the same story as calf prices,” Anderson says when forecasting his feeder cattle prices. His first-quarter projections for 700- to 800-lb. prices average $250/cwt. For the second quarter, he estimates a $260 average price, third quarter $270 and fourth quarter $270.

Koontz believes feeder cattle prices will remain strong, partly because “cattle feeders are going to have to compete with herd-building demands. He projects first-quarter prices to range between $250 and $260. Koontz sees second-quarter prices from $260 to $275, third quarter from $275 to $280, and fourth quarter at $270 to $280.

Fed Cattle Projections

Koontz forecasts first-quarter, fed cattle prices to range between $187.50 and $190/cwt. Koontz sees second-quarter prices from $190 to $200, with third quarter from $190 to $195, and fourth quarter at $195 to $200.

“Again, tight supplies will remain. We will make up for lost numbers with much heavier weights,” he says. “I also think we’ll continue to see corn prices pressured – and this leads to heavier weights and more future pressure on the topside.

“Further higher movements in beef prices are just unlikely. We will see considerably more pork and eventually more chicken. These price differences with beef will put real pressure on beef and limit cattle moves, not so much for calves but certainly for fed animals. Feeding margins will be tight for the next two years.”

Anderson sees little movement in fed-cattle prices in 2025. His first quarter projection is an average of $190/cwt. He sees a second-quarter average price of $198, third quarter $198 and fourth quarter $200.

“The boost we’ve seen in fed cattle numbers on feed probably won’t last much into 2025, Anderson contends. “We’ve boosted fed cattle numbers this year [2024] through placing heifers, increased imports from Mexico and putting some cattle into feedlots earlier than usual.

“When we place fewer heifers, that tightens up supplies and boosts prices. So I think there is room for prices to increase. With growing drought conditions, we ought to expect an impact on the willingness of ranchers to expand herds.”

Cull Cow Prices

Anderson and Koontz see strong cull cow prices, as consumers spend more of their beef dollars on ground beef. Prices will vary, depending on the number of cattle imported for hamburger.

Koontz forecasts first-quarter, cull cow prices at $85 to $115/cwt., with the second-quarter prices from $115 to $130. His third-quarter projections are from $110 to $130 and fourth quarter at $100 to $120. Anderson sees a $125/cwt. annual average. “There are just fewer cows and people still like hamburgers,” he remarks.

Managing Risk

Inputs appear more manageable, with corn prices stuck at about $4/bu. “Check your mega input costs in putting together a risk management plan,” Koontz says. “Everything is cheaper than the past two years. Ignoring it or denying it does not change the fact.

“Labor remains expensive, but fuel, fertilizer, interest costs and lots of other things are cheaper, especially at the wholesale level. Freight remains high, but that’s going to be the case the further from town you are.”

He says November’s feeder cattle prices indicated that the “huge run ups are done – not in calves or bred heifers that you want to buy – but everything walking around that we sell has largely peaked. They’re all not going to go up in price.

“Volatility is here for a while, and I think it’s years before any big retreats are in the cards. But a $30/cwt. change in calf prices is a realistic chance for the next several years.”

Anderson urges close management of input costs, even with lower feed, fuel and other costs. “Spend money on the right things – things that have a positive return,” he says. “Be careful on replacement purchase prices.

“On managing cattle price risk, continue looking at the government’s Livestock Risk Production (LRP) program to lock in profits or management breakevens. It’s an opportunity to lock in a good price.”

Koontz and Anderson agree that the chance for more drought and demand are wildcards for the coming year. “The drought monitor map looks concerning. How that develops will determine herd rebuilding and prices,” Anderson says. “Beef demand has been good over the last couple of years.

“I think we’ll continue to import more and more beef to offset our declining supplies, especially on the cow-beef side. Exports will likely struggle due to high prices. Yes, prices are record high, but consumers see beef as a good product and they’re willing to pay the higher price. That’s good. But can it get too expensive relative to other choices?”

Koontz says high calf and cattle prices “are going to be very noticeable, given the cheap hay, cheap corn, cheap wheat and cheaper soybeans. I think we’re going to talk more about what’s going on with substitute meat prices than we have for years.

“Feed costs are off considerably for everybody – and pigs and chickens don’t eat grass. These industries, and dairy, will very much benefit from corn being $4 and cash corn being much less in some places.”