With the benefit of hindsight, it looks like “easy money” compared to the hard annual slog of Irish farmers, with no guarantee of profit when the time comes to sell your cattle.
Cattle futures investors had their fifth profitable year in a row in 2014.
You can invest in live cattle or feeder cattle contracts on the Chicago Mercantile Exchange.
In the US, cattle farmers, beef processors, consumers, and independent traders invest many millions of dollars each year in these contracts.
Many of them “hedge” their market positions in order to reduce the volatility and uncertainty associated with livestock production.
The 2014 rise in cattle futures was driven by the return to growth in the US cattle herd, after a fall at the start of 2014 to its lowest population since 1951.
A market unsettled by the effects of drought, and elevated feed and grain prices, provided ample opportunity for well-informed investors.
In 2015 investors will have to weigh factors such as expected record US beef prices, due to production declining yet again, by a predicted 2-3%, on top of 5% in 2014.
But a moderate rebound in pork and chicken supply may ease beef prices.
In 2014, improving pasture conditions and a receding drought have encouraged ranchers to retain heifer calves and place them into the breeding herd, rather than putting them in the supply chain to be fed for slaughter.
The US cow slaughter was down 14% in 2014, due to aggressive herd rebuilding.
But spring rains will help determine the amount of continued retention of cattle for breeding in 2015. Meanwhile, the improving US economy, and lower fuel prices, support beef consumption.