Cattle Futures Hit New Record High As Polar Blast Set To Hit Nation’s Beef Supply

Cattle futures in Chicago surged to fresh record highs on Friday, driven by severe winter weather forecasts for the Central Plains and Midwest, two key regions home to the nation’s cattle belt. Analysts warn that the harsh conditions could reduce herd sizes and impact carcass weights, further tightening the nation’s cattle supply. 

“While cattle can tolerate cold weather, extreme cold forces them to expend more energy, directly impacting feed conversion rates and ultimately reducing carcass weights,” Daily Livestock Report wrote in a note on Friday, warning that cattle weights fell 3% during last year’s cold blast across the Lower 48. 

For the last week, we have been tracking polar air blast models and incoming winter storms expected for the eastern half of the US. Also, we touched on energy markets, specifically soaring NatGas prices:

• Dec. 27: “All Systems Go” For Polar Vortex Air Dumping Into US

• Dec. 30: NatGas Futures Spike Ahead Of Forecasted “Historic Cold”

• Jan. 2: Old Man Winter Points Crosshairs On US Mid-Atlantic

As of Friday morning, the NWS Weather Prediction Center’s latest forecast shows widespread heavy snow and ice from the Central Plains (cattle belt) to the Mid-Atlantic this weekend and early next week. 

The cold weather complicates America’s crumbling cattle herd. The latest figures show the herd size has tumbled to the lowest levels since 1961.

As a result, Cattle futures in Chicago jumped to fresh record highs. 

We noted last month…

Bullish Cattle Bets Soar As US Herd Crisis Sparks Breakout To Record High Price https://t.co/tIScxRIHwG

— zerohedge (@zerohedge) December 17, 2024

The nation’s tight cattle supply, unable to rebuild quickly enough, has driven average retail ground beef prices to record highs, reaching $5.628 per pound in late 2024, according to USDA data. However, we all know ground beef prices are often much higher—especially for “organic” ground beef, where prices can exceed $10 or more per pound.

Prices are going much higher in 2025.