Cattle:

2025 Beef Export Pace: Year to date beef shipments for 2024 delivery are -1% from last year. That is just over USDA's current goal of -3%. Sales for 2025 delivery were normal for this week, 13,066 tonnes. Year to date sales are -12% from last year. That is on USDA's goal of -12%.

China Investigates Low Beef Prices: The commerce ministry announced it would look into beef import levels from 2019 - 2024 given current low domestic prices. China is our #3 export market. Last year they took 20% of our beef exports. The fact that US fed and feeder cattle futures today ignored this story is remarkable.

Falling Weights: The weekly Actual Slaughter report detailed meat production statistics for the second week of December. Dressed steer weights fell -2 lbs. from the prior week, now 950 lbs. Dressed heifers were +1 at 866. Compared with last year steer weights dropped from +13 lbs. to now +9. Heifer weights fell from +13 lbs. to now +12. Cattle weights have trimmed down sharply in recent weeks, from +3.4% year over year in October to now +1.1%.

Cash Cattle: The South traded this week at $192 and $193. Last week was $191. Nebraska traded at $196/$197 live and $307 dressed. Nebraska traded at $195 live and $306 dressed last week.

Wholesale Beef?: If you add in Thursday's +4.41 choice gain, and today's +0.95 morning trade, beef put in a new high for its now 28 day uptrend. That gain is now +$18.00.

USDA Border Comments: On 12/13 USDA's chief veterinarian suggested, "Shipments will likely resume incrementally after the New Year, with full resumption of live animal movements sometime after that". We import 4% of our live cattle slaughter from Mexico. 2% comes from Canada. Weekly import totals of lightweight Mexican feeder cattle are about 30,000 head. So far, we have no new updates from USDA since 12/13.

USDA 2025 Beef: USDA's current balance sheet shows adjustments assuming a closed border with Mexico. When it is re-opened they will reverse much of these changes. USDA has 2025 beef production at 25.665 billion lbs., -5.1% from 2024. They lowered this production number by a large -615 million lbs. from November's report. The prior month they were at -2.8%. By quarter they are at +1.0% for Q1, -1.7% for Q2, -6.3% for Q3 and a large -12.8% for Q4. Again, this is an artificial balance sheet. With the hole in supply they lightly offset it with -105 million for exports and +195 for imports. Beef left for the US consumer, the supply metric that determines cattle and beef prices, would fall from 58.2 lbs, per capita to 57.6. This is a -3.5% hit from 2024. This would be the lowest supply offering since 2018, seven years.

Tariff Talk: President Trump announced on social media that on his January 20 inauguration he would, “… sign necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States.” He noted this would remain in place until the two countries clamp down on hard drugs entering the US as well as illegal immigration. He also separately noted the US will be charging China an additional 10% tariff, above any additional tariffs, on all of their many products coming into the US.

US Live Cattle Imports: The US imported 2.0 million head of live cattle last year. This was 6% of our annual kill. Of this group 63% came from Canada, 8% from Mexico and zero from China.

US Beef Imports: The US is a net importer of beef based on quantity. It is a light net exporter based on value. We brought in 3.7 billion lbs. of foreign beef last year. 27% comes from Canada, 17% from Mexico and zero from Canada.

US Live Cattle Exports: The US exported only 290,299 head of cattle last year. This is not an issue to discuss as it represents about 1% of US cattle production.

US Beef Exports: There are no retaliatory tariffs from other countries against the US yet. We are a net importer of processed beef based on quantity. Of last year's 3.0 billion lbs. of US exports 9% went to Canada, 10% to Mexico and 17% to China.

Fed cattle futures are still in an uptrend on the chart. New highs were made in recent days then a sharp failure. Prices have lightly rebounded from near term support.

March feeder cattle hit new highs and a new highest close today. Bears did have a clear chart picture for them at the start of the week. There are three points they are monitoring. There is one downside gap at the 12/5 close of 253.60. Next there is the general low of this recent sideways trade, the 12/5 low of 253.22. Next is the second downside gap at the 11/22 close of 253.12. These three chart points are all right next to each other. A break of those lows could restart interest in re-filling a lot of that open downside space on the chart, 247 - 253. Today's gains not only put bears on the backfoot, they also remove the possibility of a Head & Shoulders top chart formation…Rich Nelson

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Hogs: 

Futures continue to hold just above chart support. The market has absorbed Monday's lightly bearish quarterly Hogs & Pigs report quite well. Some in the trade suggest PRRS concerns may offset USDA's high pigs per litter estimate for the September - November quarter. Artificial support remains given trade concerns, Canadian live hog imports, and light US slaughters this quarter.

2025 Pork Export Sales: Year to date pork shipments for 2024 delivery are +6% from last year. That is just over USDA's current goal is +4%. Sales for 2025 delivery were weak in last week's report but strong on this one, 39,411 tonnes. Year to date sales have improved to +13% from last year. USDA's goal is +3%.

No Weight Problem: Dressed barrow/gilt weights fell -1 lb. from the prior week, now 214 lbs. Compared with last year they went from +1 lb. to now even.

Cash Hogs Stabilize: Even including Thursday's -0.79 trade we can say over the past 11 sessions cash hogs have not posted a new low. The Lean Hog Index is 84.85. There is normally another week ahead before the year's major low for cash markets is typically made. Cash hogs may have put in an early low.

February Futures: In 13 of the past 20 years cash hog prices were higher in February than December. It is a normal occurrence given the usual light decline in supply after the supply peak for the year in early winter. Currently, February has now rebounded from a discount vs. the 83.84 cash settled December to now a premium (as it should). Perhaps if February breaks this chart support we're monitoring, and that discount widens to $3, we may be interested in a long approach.

Wholesale Pork Stabilizing: Including today's morning trade of +1.56 this market has rallied +8.61 over 14 sessions. Cash pork may have posted an earlier than normal winter low.

Minimally Bearish Hogs & Pigs Near Term: The nation's hog producers told USDA that hogs alive on December 1, for slaughter through June 30, were +0.5% from one year ago. This is the category called Kept for Marketing. The trade expectation was +0.1% from last year (ALDL +0.1%). Weight data, which shows the slaughter flow over these six months, is -0.5% year over year for heavyweights and +1.2% for lightweights that finish out into summer.

Lightly Bearish Hogs & Pigs Extended Term: The nation's breeding herd as of December 1 was even with last year. That was on the expectation (ALDL -1.5%). Given slaughter numbers for sows and boars over the past three months this would imply a few new gilts were added. At 6.004 million head, over 5.999 the year before, breeding herd liquidation is now over. We will also point out pigs per litter growth in the completed Sep - Nov period was +2.3% year over year. And that comes on top of the +3.9% that 2023 posted over 2022. Farrowing intentions over the next two quarters, which determine hog slaughter in the second half of 2025 were unchanged for December - February and +1.4% for March - May.

USDA 2025 Pork: USDA sees 2025 at 28.370 billion. This is a bit large at +2.0% from 2024. USDA's view would not give any credence to increased PRRS talk in recent weeks. Their current view for per capita pork supplied, the main metric that determines hog/pork prices, at 50.9 lbs. would be the largest in three years.

The trade is discussing more PRRS findings and suggesting USDA's 2025 pork supply view may be too high. That was certainly not shown on the recent H&P report though.

Tariff Talk: President Trump announced on social media that on his January 20 inauguration he would, “… sign necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States.” He noted this would remain in place until the two countries clamp down on hard drugs entering the US as well as illegal immigration. He also separately noted the US will be charging China an additional 10% tariff, above any additional tariffs, on all of their many products coming into the US.

US Live Hog Imports: The US imported 6.7 million head of live hogs last year. This was 5% of our annual kill. Almost all of these numbers are from Canada. This is the main factor in today's trade, perceived lowered supply in the US.

US Pork Imports: The US imports only about 4% of our production, 1.1 billion lbs. Of this minimal amount 65% comes from Canada, 8% from Mexico and zero from Canada.

US Live Hog Exports: The US exported a minimal 67,806 head of hogs last year. This is not an issue to discuss as it represents about zero of US hog production.

US Pork Exports: At this time there are no retaliatory tariffs to discuss. If they do come, it would hit US pork negatively. The US is a significant net exporter of pork. 25% of our production is sent to foreign buyers. Of this 8% goes to Canada, 38% to Mexico and 7% to China.

The chart picture shows a sideways trade for two months. Bulls hope for a chance at the intraday upside gap from the 12/3 close, 87.85. This market has shown no interest in filling that area. Directly ahead is a likely test of support, November lows at 82.10. A break of support could also invite speculation over a Head & Shoulders top formation. The projection on the February would be down to 75.57...Rich Nelson