Cattle and Hogs in Q1 2025- Where are they Heading in Q2?
In my on cattle and hog futures markets in Q4 2024 and last year, I concluded:
The trend is always your best friend in markets, and it has been bullish in live and feeder cattle and lean hog futures since the April 2020 lows. As the animal protein markets move into 2025, prices remain on a bullish path. The peak grilling season begins in May and runs through September when the demand increases, and prices often reach seasonal highs. However, the potential for U.S. tariffs in 2025 could cause the most volatility in beef and pork prices.
Live cattle futures settled 2024 at $1.9160 per pound, with the feeders settling at $2.63035 per pound. Lean hogs closed last year at 81.30 cents per pound. The beef and pork markets increased in Q1 2025 as the bullish trends since the 2020 lows continued to take prices higher.
Live cattle rise by over 8%
The nearby live cattle futures contract rose 8.46% to settle Q1 2025 at $2.0780 per pound.
The quarterly continuous futures chart highlights that live cattle futures reached a new record high in Q1 2025 and closed at the record peak.
Feeder cattle did slightly better
Feeder cattle futures slightly outperformed the fat cattle, with an 8.91% Q1 2025 gain, closing on March 31 at $2.8645 per pound.
The quarterly chart dating back to the early 1970s shows the feeders reached a new all-time high in Q1 2025 and closed near the peak.
Lean hogs posted a nearly 8% gain
Lean hog futures slightly underperformed the cattle futures but managed to gain 7.90% in Q1 2025, settling at 87.725 cents per pound on March 31, 2025.
The quarterly chart illustrates the pattern of higher lows since the 2020 41.50 cents per pound pandemic-inspired bottom.
The WASDE warns that prices are high
The USDA's March World Agricultural Supply and Demand Estimates Report reflects high prices in cattle and hogs:
Cattle price forecasts are lowered for the first half of 2025 based on recent prices. The second half is unchanged as demand for cattle is expected to remain strong. Hog price forecasts are lowered for the second and third quarters, based on recent prices and slightly weaker demand than previously expected.
The full text of the March WASDE report is available through this link. Meanwhile, the USDA's Hogs and Pigs Report on March 31 told the markets that limited supplies could support prices. JP Morgan's analysis of the report is available through this link.
The prospects for the 2025 peak grilling season beginning in late Q2
Beef prices are at all-time highs, and pork prices are making higher lows going into the 2025 peak grilling season, which runs from late May through early September. Meanwhile, the cattle and hog futures markets begin reflecting the increased demand as the BBQs come out of storage long before the Memorial Day weekend holiday, which marks the start of the peak animal protein demand season.
The trend is always your best friend, so we should expect higher cattle and hog prices over the coming weeks and months. However, the risk of corrections will rise with prices. The bottom line is that those burgers, hot dogs, steaks, sausages, and ribs will cost more this year.
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