Until they reach a specific weight (typically 600-800 lbs), live cattle are specially raised for beef production. This process begins when they are calves and ends when they reach the required weight; after this, they are then transferred to feedlots and considered "feeder cattle". Contracts for live cattle in the CME are for 18 metric tons.
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Live Cattle Facts
Most cattle are bred in the summer to ensure that their calves are born in the spring season because of both the temped climate and the abundance of pasture to feed on. Around 8 months of age, cattle are weaned from their mothers and sent to feed lots in order to encourage growth to full size (600-800 lbs.). At the feed lots, live cattle are fed a certain diet in order to inhibit weight gain. When the cattle reach an approximate weight of 1,200 lbs., they are considered to be suitable for slaughter and are sold to meat packers. The Unites States exports over 2 billion pounds of beef very year.
Live cattle futures and options are traded in cents per pound on the Chicago Mercantile Exchange. Live cattle futures can allow traders to address price risk among those involved in the trade of live cattle and to assess supply and demand of cattle for both the current and future outlook.
Source: Barchart
Last updated October 2015.