Cattle markets: 2022 and beyond

Rabobank released the Q4 market outlook and a glimpse into 2022.

December 1, 2021

5 Min Read
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Beef is expected to be important in all facets of the American life in 2022. That’s what a report out from Rabobank for the last quarter of 2021 says about the industry.

Overall, the U.S. will remain a major beef producer, consumer, exporter and importer.

The report from Rabobank looks at the future global beef market, which is expected to tighten in 2022 as U.S. beef production contracts and alters global trade flows. Despite contracting production and strong domestic demand, the U.S. will increase beef exports by 2 percent to 4 percent in 2022


No one can talk about markets and not mention the Covid pandemic, especially as it continues to impact the world. Global Covid cases started rising again late October, with Europe seeing a large jump in case numbers. Some governments have reintroduced control measures to contain Covid outbreaks, including restrictions on foodservice. China’s zero-tolerance approach to Covid also restricts many service channels. If the Covid measures are no successful, beef markets are expected to see reduced opportunities for beef in some foodservice channels in both regions over the coming months.


Brazilian exports to China continue to be suspended, following reports of two atypical bovine spongiform encephalopathy (BSE) cases in September. Brazilian cattle prices have contracted dramatically because of the limited export opportunities.

Freight costs

Reduced investment in shipping and container in 2019, Covid related increased demand for goods and market imbalances in 2020 and 2021, and shipping congestion and cancellations have continued to push freight rates to stratospheric levels in Q$ 2021. Rabobank believes global shipping disruptions will continue in 2022 and as a result, costs for containerized freight particularly reefers will remain high.

USA cattle cycle and beef production

The global beef market is set to tighten in 2022. Rabobank believes this will put stress on markets that are experiencing strong demand. One of the contributors to this tighter market is the contraction of beef production in the US.

The current cattle cycle peaked in 2019 with a herd inventory of 98.4 million head. The herd decline has increased in 2021 due to poor economics and drought liquidation across the west. For the year-to-date, beef cow slaughter has been up 10 percent and dairy cow slaughter has been up 2 percent for an increase of 6 percent.

Increased cow slaughter will lead US beef production to be down 2.5% in 2022. Drought conditions have eased in some areas, but long-term drought conditions are still a concern for the 2022 grazing season. Feed supplies are restrictive. Hay supplies are limited with alfalfa prices better than $200 a metric ton and other hay at 188 a metric ton.

The future

Many beef producers are wondering if 2022 will be a precursor to what is to come.

As tight as the 2022 market appears, Rabobank states it may just be the start of a bigger event in 2023. With U.S. cow slaughter expected to continue and the decline in production not expected to reverse until 2023 or beyond, plus limited export supplies from Australia, global beef markets are on a tightening trend. With China’s beef imports continuing to grow, import demands from Japan and South Korea remains firm and U.S. imports requirements increasing, the stage is set for Brazil and other exports to increase their shipped volumes. If this doesn’t happen, beef producers will likely find themselves in a more severe situation come the end of 2022.

US Market outlook

Rabobank believes the overall beef market outlook for 2022 is solid. The US average retail price for all beef in October set a new record of $7.55 a pound and $7.90 per pound for Choice Beef. On top of a high retail demand, the reopening of restaurants and continued brisk exports are driving the higher retail prices.

Wholesale beef prices have corrected seasonally through the fall but are still above seasonal historical comparisons. The escalated wholesale and retail prices are expected to work upstream to higher prices for all weight classes of cattle in 2022. The huge driver expected to improve cattle prices in the new year is the fact that beef packers are slowly showing headway in stabilizing their workforce, which has improved weekly slaughter rates. The other significance difference is the fact that the long-running backlog of market-ready cattle is easing, supporting live cattle prices.

After trading in a sideways pattern between $120.CWT to $125/CWT for the majority of the year, fed cattle prices have finally broken through overhead resistance.

Feeder cattle prices trended higher seasonally to late August/September before peaking. The CME feeder index has been trading in a sideways pattern since mid-September at the $155/CWT level. That continues to look incredibly strong given ongoing high feed grain prices. Projected corn supplies for the coming year are expected to be snug but certainly available. The current strength of corn futures and especially the strength in corn basis levels, this close to harvest implies feed grain prices will stay at elevated levels, impacting feeding margins.

Calf prices for a 450 to 500-pound calf have strengthened in recent weeks, as man of the areas that were under the most severe drought have received at least some meaningful rain. Calf availability is currently abundant as calves ship in late fall. Without question, the availability of replacement cattle will contract during the coming year, as backlogged supplies clear The accelerated beef cow slaughter during 2021 will cause a sizable decline in offerings in late 2022 and 2023.

While there are not a lot of replacement cows trading, most prices on reported sales in a range of $1800 to $2500 per head. Cull cow prices have remained firm even with the heavy sales early in the year. Demand and prices for lean grinding meat have remained firm and stable due to the slowdown in beef imports. The foundation is in place for a better market in 2022.

Source: Rabobankwhich is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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