A beginner’s guide to cattle: Price, uses & market overview

By:

Prash Raval

Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.

Updated:  Aug 28, 2024

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On this page, we explore everything you need to know about cattle. Gain insights into cattle market trends, pricing mechanisms, and the environmental impact of cattle. 

Read on to learn more about this popular commodity and find links to beginner friendly guides explaining how you can get involved in cattle. 

What is cattle?

Cattle, or feeder cattle includes livestock like cows, steers, and bulls raised for dairy, meat, and other products. Around 1 billion cattle exist worldwide and have been integral to human civilization for thousands of years. 

Indigenous to Europe, cattle were one of the first domesticated animals and provided milk, labour for ploughing, and transportation of goods and people. Beef, veal, cheese, and milk are the most consumed cattle products. 

Brazil, India, and the United States are leaders in the cattle industry and beef production. While global demand continues to rise, environmental issues like emissions and a rise in veganism could potentially shape cattle’s future. 

Cattle market overview

Cattle have been a traded commodity for many civilizations. The modern cattle market emerged in the 19th century in Chicago where brokers looked to stabilise volatile pricing for farmers and meatpackers. 

Standard contracts for live cattle and beef carcasses were introduced which later led to cattle futures and options, both of which are traded on the Chicago Mercantile Exchange (CME). 

Today, tens of billions of dollars in cattle trade hands annually. Major beef exporters like Brazil, India, and Australia ship tons of cattle to Asian, and Middle Eastern markets. The value of cattle has been consistently rising for decades. The Coronavirus pandemic was the first time in many years that prices dropped, however, the market has been quick to recover. 

Are cattle valuable? 

Yes, cattle is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.

• Cattle are a source of food. Beef is a major source of protein for people around the world. In 2020, global beef production reached 100 million tonnes, and it is projected to continue growing in the coming years. This demand for beef is driven by population growth and rising incomes in many countries.
• Cattle are a source of other products. In addition to beef, cattle also produce milk, leather, and other byproducts. Milk is a nutritious food that is consumed around the world. Leather is a durable material that is used in a wide variety of products, including shoes, bags, and furniture.
• Cattle are a store of value. Cattle have been used as a store of value for centuries. This is because they are a durable asset that can be easily transported and stored. In times of economic uncertainty, investors often turn to cattle as a safe haven for their money.
• Cattle can be used as a hedge against inflation. Cattle prices tend to rise with inflation. This is because the cost of inputs such as feed and labour increases with inflation. As a result, cattle can be a good hedge against inflation for investors.

How to invest in cattle

You can invest in cattle by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different platforms suitable for specific requirements. 

Some let you buy physical cattle, others let you trade cattle, and many are designed for investing in the grain. Visit our dedicated guide to discover how to invest in cattle.

Cattle in your investment portfolio

A diverse investment portfolio can help protect you during market uncertainty, and the inclusion of cattle can add value while allowing you to spread your money across various markets. 

Cattle often moves independently to traditional investments like stocks and bonds. You can include cattle in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view commodity grains such as cattle as attractive options. 

Cattle’s long history and the fact it is a food staple for much of the world, makes it a good long term play.

Cattle vs other commodities

Cattle is an agricultural commodity. Each commodity is unique in its own way and offers different features for investors and traders. You can learn more about specific commodities using our dedicated guides below. 

• Wheat. Wheat is a grain that is grown around the world and is used for various foods. 
• Corn. Corn is one of the most versatile commodities with many uses, including livestock feed, biofuel, oil, and food. 
• Rice. Rice is the most popular grain commodity and a staple for half the world’s population 
• Soybean. Soybean is a major global commodity used for livestock feed and cooking oil.

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