Christmas is a joyous time for some while it is less joyous for others due to circumstances or events associated with the time period. Given my joyous nature during the Christmas season, I thought it would be appropriate to temper my joy and discuss some historical events that that will be called the “Ghosts of Christmas Past: Cattle Edition.” This may not make much sense at this point in the article, but hopefully, past events and the current environment can be tied together with a nice little bow.

The best place to start this Christmas story is with the “Cow that stole Christmas” on December 23^rd 2003. This was the day the federal government announced the discovery of bovine spongiform encephalopathy (BSE) in a Holstein cow in Washington state. Thus, 22 years ago, cattle markets went from steady as they go to complete debacle. In just a few days, feeder cattle prices declined 10 to 15 percent while finished cattle prices declined a little more than 15 percent. It took feeder cattle and fed cattle prices four months to regain traction and move back to the same level as before the disease discovery. The worst part of this situation was the closure of many beef export markets to U.S. beef.

The Energy Independence and Security Act of 2007 (EISA) was signed into law on December 19^th 2007. The base of this policy started with the Energy Policy Act of 2005, which focused on renewable energy. EISA established the Renewable Fuels Standard, which required a minimum of 36 billion gallons of renewable fuels to be used annually by 2022 for transportation fuel. This may not seem directly related to cattle for some, but it had a large impact on cattle feeders as most of the renewable fuel was originating from corn in the form of ethanol. This presented a challenge as feed prices escalated due to strong demand for corn. Alternatively, the use of corn for ethanol production resulted in a readily available protein source in the form of dried distillers grain.

Drought cannot be overlooked in this discussion. The Southeast drought in 2007, the Southern Plains in 2011, and almost nationwide drought in 2012 put a damper on Christmas and cattle markets for many in the industry as herd liquidation was a common theme in each of these droughts. A time of extremely high cattle prices were riding on the coattails of the 2012 drought as record cattle prices were experienced in 2014 and 2015, which may mean good ghosts do exist! A similar drought story could be told of recent years as many cattle producing regions have experienced differing degrees of drought the past few years, which has resulted in strong cattle prices once again.

Fast forwarding to the current market situation, there has been plenty of political rhetoric leading up to Christmas 2025 that has attempted to dissolve the strong cattle market. These political statements have centered around the “need to reduce beef prices,” importing more beef, and the closure of the Mexican border to cattle due to the New World Screwworm. Some of this was further exacerbated with the federal government shutdown, which resulted in many USDA reports not being released during the shutdown. Ultimately, all of this combined led to considerable volatility in the cattle markets as well as a corrective price action that resulted in live cattle futures declining as much as $40 per hundredweight before recovering some of those losses. The cash market did not decline to that degree, but it did make it difficult for hedged positions in some instances.

Despite all the “ghosts” mentioned here sounding like “bad” or “scary” ghosts. Each of these events have one thing in common and that is the cattle markets always recovered and the United States cattle industry has proved to be resilient through all of these events. Thus, no matter what ghost shows up with ill intentions, there always seems to be something that scares it away and brings prosperity back to the market. Thus, if any cattle producer is concerned about the times and how tough they may get, just give it a little time, because the market will improve on the heals of the tough times.