Producers urged to strengthen risk plans as cattle prices shift quickly
The cattle market has experienced a month of unusual volatility, creating concerns for producers who rely on stable prices. In mid-October, cattle prices were achieving new highs, and the market appeared strong despite scattered negative signals. However, conditions shifted quickly when public discussions emerged about lowering beef prices. This led markets to react strongly to any news that appeared bearish, including expectations for higher beef imports and possible changes in live cattle imports.
By November 14, feeder cattle futures on the November CME contract had dropped more than $42 per hundredweight from mid-October. Live cattle futures also declined sharply, with the December contract down nearly $30 per hundredweight. These movements occurred even though overall market fundamentals remain mostly unchanged. Supplies of cattle are still tight, and beef demand continues to appear strong. However, uncertainty often causes markets to discount prices, and that is what has happened during this period.
The decline also reflects how rapidly rising prices earlier in the year left markets vulnerable to a correction. By mid-October, feeder cattle futures were more than 43 percent higher than at the start of 2025, making them sensitive to any shift in sentiment.
These changes have had a major impact on the value of fed and feeder cattle. Many producers seek advice on risk management only after prices fall, but this is not the ideal time to build a strategy. Tools such as futures, options, forward contracts, and insurance can help manage risk, but they cannot recover prices that were not protected in advance.
This period reminds producers that risk planning must always be forward-looking. Farmers should run budgets for a wide range of possible sale prices, including large swings that may seem unlikely. Doing so helps producers understand the level of risk they can accept and the returns they may trade to gain protection. Every operation is different, but all producers benefit from evaluating the impact of major price changes and preparing strategies to manage them.
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