Feeder Cattle Futures Explained: How to Trade Futures On Feeder Cattle
Date Modified: 4/12/2026
When entering the world of Agricultural Futures trading, the wide array of available contracts can, at times, seem hard to understand. In this article, we’ll look at the ins and outs of Feeder Cattle to give you a better handle on this corner of the Futures arena.
TL;DR: Feeder Cattle Futures Key Points
- Definition: Feeder cattle Futures are standardized contracts representing 50,000 pounds of young cattle (600-800 lbs)
- Exchange: Traded on CME Group under the symbol GF
- Trading Hours: 8:30 AM - 1:05 PM CT, Monday-Friday
- Contract Value: $12.50 per tick ($0.00025 per pound)
- Settlement: Cash-settled based on the CME Feeder Cattle Index
- Key Drivers: Feed costs, weather, beef demand, disease outbreaks
Quick Answers: Feeder Cattle Futures
- What are feeder cattle Futures?
Feeder cattle Futures are standardized financial contracts representing 50,000 pounds of young cattle (600-800 lbs) traded on CME. These contracts allow investors to speculate on cattle prices or hedge market risks without physically handling livestock.
- How do feeder cattle Futures work?
Each GF contract trades in $0.00025 per pound increments, with each tick worth $12.50. Contracts are financially settled based on the CME Feeder Cattle Index, derived from U.S. Department of Agriculture auction sale data.
- What's the difference between feeder cattle and live cattle Futures?
Feeder cattle represent younger animals (600-800 lbs) still growing, whilst live cattle Futures represent mature cattle (1,200-1,400 lbs) ready for slaughter. They trade in alternating months with different contract specifications.
What Are Feeder Cattle?
Feeder cattle refer to young male and female cattle, typically weighing between 600 and 800 pounds, that have been weaned from their mothers but have not yet reached full maturity. According to the National Cattlemen's Beef Association, feeder cattle represent approximately 60% of the total cattle inventory in the United States.
Often called "store cattle" in industry terminology, they are purchased by feedlot operators where they undergo a "finishing" process. During this stage, cattle are fed high-energy diets to reach target weights of 1,200-1,400 pounds before processing.
The U.S. Department of Agriculture classifies feeder cattle into two main categories:
- Feeder calves: Under one year old
- Feeder yearlings: Aged one to two years
These classifications affect pricing and market demand, with yearlings typically commanding higher prices due to their advanced development stage.
Current Feeder Cattle Futures Market Data
Contract Specifications (2025):
- Symbol: GF (CME Group)
- Contract Size: 50,000 pounds
- Minimum Price Fluctuation: $0.00025 per pound
- Tick Value: $12.50
- Trading Hours: 8:30 AM - 1:05 PM Central Time, Monday-Friday
- Settlement Method: Cash-settled via CME Feeder Cattle Index
- Trading Months: January, March, April, May, August, September, October, November
According to the CME Group, daily trading volume for feeder cattle Futures averages 15,000-25,000 contracts, representing approximately $375-625 million in notional value.
What Months Are Feeder Cattle Futures Traded?
Feeder cattle Futures trade in eight months annually: January, March, April, May, August, September, October, and November. These months are strategically chosen to align with seasonal cattle production cycles and complement live cattle Futures trading months.
The trading calendar reflects natural cattle breeding and feeding patterns:
- Spring contracts (March-May): Align with cattle moving to pasture
- Fall contracts (August-November): Correspond with harvest and feedlot placement seasons
This schedule ensures continuous price discovery throughout the year while avoiding overlap with live cattle Futures months.
How to Trade Feeder Cattle Futures
Trading feeder cattle Futures requires understanding both contract mechanics and market fundamentals. Here's a step-by-step approach:
Choose a Qualified Futures Broker
Select a broker like Plus500 that offers:
- Access to CME agricultural markets
- Competitive margin requirements
- Real-time market data and analysis tools
Understand Contract Specifications
- Each GF contract represents 50,000 pounds of feeder cattle
- Minimum margin requirements typically range from $1,500-$3,000 per contract
- Price movements of $0.01 per pound equal $500 profit/loss per contract
Monitor Key Market Reports
Essential data sources include:
- USDA Cattle on Feed Report: Released monthly, showing feedlot inventories
- Weekly Export Sales: Tracking international beef demand
- Weather Reports: Monitoring drought conditions affecting pasture and feed crops
Implement Risk Management
Due to livestock market volatility, successful traders employ:
- Stop-loss orders to limit downside risk
- Position sizing based on account capital
- Diversification across multiple agricultural contracts
What Drives Feeder Cattle Prices?
Multiple interconnected factors influence feeder cattle pricing, creating a complex market environment:
Feed Costs (Primary Driver - 40-50% of price variance)
Feed expenses represent the largest cost component in cattle production. According to the Iowa State University Extension, feed costs account for 65-75% of total cattle finishing expenses.
Key feed commodities affecting prices:
- Corn: Primary energy source in cattle diets
- Soybean meal: Essential protein component
- Hay and forage: Critical during drought periods
When corn prices rise $1 per bushel, feeder cattle prices typically decline $15-20 per hundredweight due to increased production costs.
Weather Conditions
Extreme weather significantly impacts cattle operations:
- Drought: Reduces pasture quality, forcing early cattle sales
- Excessive heat: Decreases cattle's appetite and weight gain
- Winter storms: Increase feed requirements and mortality risk
The 2023 drought across major cattle-producing states caused a 15% decline in feeder cattle prices as ranchers liquidated herds.
Beef Demand and Consumer Preferences
According to the USDA Economic Research Service, U.S. per capita beef consumption averages 57 pounds annually, generating over $100 billion in retail sales.
Demand factors include:
- Restaurant industry growth
- Export demand (particularly from Asia)
- Competition from alternative proteins
- Economic conditions affecting consumer spending
Disease and Health Concerns
Disease outbreaks can dramatically impact cattle markets:
- Bovine Spongiform Encephalopathy (BSE): Can trigger trade restrictions
- Foot and Mouth Disease: Leads to immediate livestock movement bans
- Respiratory diseases: Common in feedlots, affecting weight gain
The 2003 BSE discovery in Washington State caused a 20% immediate decline in cattle Futures prices.
Feeder Cattle History & Facts
Feeder cattle have been an integral part of the beef industry for decades, playing a key role in the production of beef. These are young cattle that have been weaned from their mothers but haven’t yet reached maturity. Typically sold to feedlots, they undergo a process known as “finishing,” where they are fed to gain weight before being sent for processing. The practice of buying and raising feeder cattle dates back to the early 1900s and has evolved with advancements in farming technology and cattle management. Over time, the value of feeder cattle has been influenced by factors like feed prices, beef demand, and overall market conditions.
Main Uses of Feeder Cattle
Feeder cattle are primarily raised for their role in beef production, which supplies a variety of food products such as steaks, hamburgers, and roast beef. Beyond meat, cattle provide valuable by-products like liver, kidneys, and tripe, which are consumed in many countries. Beef fat is used to produce items such as margarine, shortening, and even chewing gum. Cattle hides are processed into leather for clothing, furniture, and accessories. Non-food uses of cattle include fats for industrial oils, soaps, and cosmetics, while bones, horns, and hooves are crafted into buttons, glues, and fertilizers. This diverse range of applications makes feeder cattle crucial to numerous industries.
Why Are Feeder Cattle Valuable?
Feeder cattle play a crucial role in the global economy, particularly in the beef industry. These cattle, typically weighing between 600 and 800 pounds, are fed a high-energy diet to promote growth until they reach 1,200 to 1,400 pounds, at which point they are processed for beef. With global beef consumption reaching around 60 million metric tons annually, feeder cattle are essential in meeting this demand. The meat and poultry industry contributes over $1 trillion to the U.S. economy alone and provides millions of jobs. Feeder cattle are also significant in the Futures market, where they are traded as a valuable commodity.
Feeder Cattle Futures
Feeder Cattle Futures are among the most actively traded livestock contracts in the U.S., representing the future delivery of cattle that have been weaned but are not yet fully mature. The Feeder Cattle Futures market provides investors and traders with a way to speculate on the price of these young cattle, which can fluctuate due to various factors, including feed prices, weather conditions, and global demand for beef. These Futures contracts are commonly used to hedge cattle production risks and market volatility risks.
Feeder Cattle Futures Contract Specifications
The CME Group Feeder Cattle Futures contract (GF) represents 50,000 pounds of feeder steers, with price movements recorded in increments of $0.00025 per pound. Each price tick is worth $12.50, allowing traders to enter positions with manageable exposure. These contracts are financially settled based on the CME Feeder Cattle Index, which is derived from U.S. Department of Agriculture auction sale data. Feeder Cattle Futures trade Monday through Friday from 8:30 a.m. to 1:05 p.m. Central Time.
Why Trade Feeder Cattle Futures?
Trading Feeder Cattle Futures offers several potential benefits. One primary reason to trade is the opportunity to diversify an investment portfolio, as Feeder Cattle Futures typically have a low correlation with traditional financial assets like stocks and bonds. This means they can act as a hedge against market volatility. Additionally, traders can take advantage of cattle market price movements driven by feed prices, seasonal weather patterns, or shifts in beef demand. However, trading these leveraged Futures contracts comes with risks, as small market movements can lead to significant financial gains or losses, making it crucial for traders to manage their risk exposure carefully.
Feeder Cattle vs Live Cattle Futures: Key Differences
Understanding the distinction between these two cattle contracts is crucial for traders:
Aspect | Feeder Cattle (GF) | Live Cattle (LE) |
|---|---|---|
Weight Range | 600-800 pounds | 1,200-1,400 pounds |
Contract Size | 50,000 pounds | 40,000 pounds |
Tick Value | $12.50 | $10.00 |
Trading Months | Jan, Mar, Apr, May, Aug, Sep, Oct, Nov | Feb, Apr, Jun, Aug, Oct, Dec |
Settlement | Cash (CME Index) | Cash (CME Index) |
Volatility | Higher (15-20% annually) | Moderate (12-15% annually) |
Price Relationship: Feeder cattle typically trade at a discount to live cattle due to feeding costs. The typical spread ranges from $20-40 per hundredweight, varying with feed prices and seasonal factors.
What Drives the Price of Feeder Cattle
- Feed Prices: The cost of feed, including hay, corn, and soybeans, plays a significant role in the price of feeder cattle. Higher feed costs can result in cattle being sold at lower weights, which can lead to a drop in prices.
- Weather Conditions: Extreme weather, such as high temperatures or droughts, can reduce cattle's appetite and slow weight gain in feedlots. This directly impacts the market price of feeder cattle.
- Health Concerns: Diseases such as mad cow disease or other outbreaks can lead to trade restrictions, price fluctuations, and even the destruction of cattle to prevent further spread, affecting the overall price.
- Market Supply and Demand: The availability of feeder cattle, influenced by factors like herd size and global beef demand, can lead to significant price fluctuations. An increase in demand for beef, particularly from key global markets, can drive feeder cattle prices higher.
Feeder Cattle Benefits & Risks
As with many aspects of the trading world, Feeder Cattle Futures contracts have their own advantages and drawbacks. Let’s look at a few of these:
Pros:
- Insight into Supply and Demand: Feeder Cattle Futures help traders understand the market dynamics of cattle being raised for beef production, allowing them to assess price risks based on supply and demand trends.
- Extended Trading Hours: These contracts offer flexibility in trading outside the typical market hours, allowing traders to respond to market movements at any time.
- Leverage and Capital Efficiency: Traders can control large contracts with a smaller initial margin.
- Hedge Against Inflation: As global demand for beef rises with population growth, Feeder Cattle Futures can act as a hedge against inflation. The value of cattle increases over time, providing protection against the loss of purchasing power.
Cons:
- Volatile Price Movements: Feeder Cattle Futures are subject to significant price fluctuations due to factors like weather, feed prices, and disease outbreaks, leading to potential risks for traders.
- Leverage-Related Losses: The leverage in feeder cattle contracts means that small market movements can result in significant losses, potentially exceeding the initial investment.
- Market Uncertainty: Unpredictable factors such as feed grain costs, cattle health issues, or shifts in global beef demand can introduce uncertainty, complicating accurate forecasting and decision-making.
- Environmental and Health Risks: Diseases like BSE (mad cow disease) and extreme weather conditions can disrupt the cattle market, affecting prices and possibly leading to lower-than-expected returns.
Conclusion
Feeder cattle Futures represent a sophisticated financial instrument offering exposure to one of agriculture's most important sectors. These contracts provide essential risk management tools for industry participants whilst offering traders opportunities to profit from livestock market movements.
The key to successful feeder cattle trading lies in understanding the multiple factors affecting prices, from feed costs and weather patterns to consumer demand and global trade dynamics. With proper risk management and market knowledge, feeder cattle Futures can serve as both a portfolio diversification tool and a standalone trading opportunity.
The current market environment, characterized by tight cattle supplies and strong demand, presents both opportunities and challenges for Futures traders. As the industry adapts to changing consumer preferences and environmental pressures, feeder cattle Futures will continue evolving as a critical price discovery mechanism.
Ready to start trading feeder cattle Futures? Plus500 offers competitive margins and comprehensive market analysis tools to help you navigate the livestock markets effectively.