2023 began with much optimism for cattle market prices and the first few months have lived up to expectations. Cattle prices have rallied sharply since the first of the year. Prices for 500-600 pound steers are 10 to 15 percent higher in Mississippi, Arkansas, and Kentucky than they were during the first week of January. In the Southern Plains (graph below), five-weight steers averaged close to $240 per CWT last week. Compared to a year ago, calf and feeder cattle prices are up 15 to 25 percent. These are prices not seen since 2014-2015.

Cattle and beef supplies have tightened and will continue to do so throughout 2023 which is expected to provide further support for cattle prices. Lower fed cattle slaughter totals and dressed weights mean beef production is expected to decline by five percent or more in 2023 compared to 2022. Live cattle prices have also rallied and averaged $165 last week in the 5-market area. CME Live Cattle Futures prices are around $160 or higher for the 2023 contracts and are above $170 for the early 2024 contracts.

Looking ahead, futures contract prices tell the story of continued optimism. All 2022 CME Feeder Cattle contracts are above $190 and the late summer/early fall contracts are near $220 per CWT (graph below).  For producers planning to sell later this year, there may be desirable price risk management opportunities given the current strong expectations for calf prices this summer. There are multiple choices to consider and you can click here to read Kenny’s February 2022 newsletter about risk management considerations.

Related:Power of Meat report: meat purchases above pre-pandemic levels