Feeder cattle are a popularly traded futures commodity which refers to cattle that have been raised to 600-800 pounds and are sent to feedlots in order to gain enough weight to be ready for slaughter (1000-1300 pounds) at which point they become live cattle. This process takes roughly 3-4 months.

Cattle have been domesticated for the last 10,000 years, however, it wasn’t until the 1800’s that beef started to take off in northern markets. The introduction of the refrigerated rail car in the 1860’s opened up the beef industry by allowing farmers to transport beef across the country. Beef saw another spike in the 1950’s with the introduction of the federal highway system. Feeder cattle were first added to the CME as a livestock product in 1971.

The U.S. accounts for 47% of worldwide beef production, making it the largest producer of beef in the world. However, the U.S. is also one of the largest importers of beef. As of August 23rd, 2018 the U.S. has imported 1.53 billion pounds of beef in 2018, up 1% from 2017. The amount of beef imported by the US can affect the price and quantities of domestic cattle purchased.

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