Within the last 12 months the futures markets have seen an impressive list of bullish moves up to all-time record highs:

Stock indexes, i.e., YM (Aug.): ±45,840

Gold (April): ±3,485/oz.

Copper (July): ±$5.89/lb.

Coffee (Feb.): ±$4.40/lb.

Bitcoin: (Aug.) ±$125,200

Cocoa (Dec. ’24) ±$12,931/metric ton

Orange juice (Sept. ’24): ± $5.89/lb.

Yet maybe the most dynamic futures market moves to all-time record highs – traded up to that level just today – can be seen in the Live Cattle and Feeder Cattle futures contracts. Since the first of the year, the two current front month futures contracts – Aug. – have made ±30% and ±26% price gains representing ±$23K and ±$48K per contract moves, respectively.

On the fundamental front, U.S. cattle inventories have plunged to their lowest levels since the early 1950s. As of this year, inventories are at or near 86 million head – the lowest in over 70 years. It has also been exceptionally dry across the heartland in recent years which has limited grazing acreage for cattle. Adding to these conditions, there is currently a ban on all cattle imports from Mexico due to the spread in that country of a devastating livestock pest called New World screwworm. Mexico is a leading source of cattle imports to meet U.S. beef demand, along with Canada.

There seems to be no real signs of stopping. Herd rebuilding takes years, not months and with herd sizes hitting multi-decade lows and producers cautious, supply won’t rebound quicky. Even if pasture conditions improve and ranchers begin to retain heifers to rebuild herds, analysts expect tight supply conditions will persist for several years.