Aided and abetted by drought, feedlots put together another month of large placements in July despite growing indications that feeder supplies are declining.
Amid continuing drought, the 2022 hay supply data illustrate why so much herd liquidation has occurred this year. It also speaks to the continuing challenges that cattle producers will face to get through the winter.
Beef exports in June 15.2% higher while beef imports were down 15.3%. Strong exports are helping offset domestic demand struggles as beef imports decreased in the face of higher cow slaughter and lean beef production.
Drought impacts have accelerated sharply in the southern plains in July, with the volume of feeder cattle in Oklahoma auctions up 24% the last two weeks and the volume of cows and bulls up nearly 124%.
Lower cattle inventories combined with a cattle on feed inventory about equal to last year, is expected to lead to a roughly three percent decrease year over year in estimated feeder supplies outside of feedlots.
None of the smaller beef export markets account for more than 1.5% of the total, but many small markets are growing and contributing to a more robust set of export markets for U.S. beef.
Exactly how continuing drought, reduced forage production and high feed prices will impact cattle and beef markets in the coming months remains uncertain.
It will take much of the remainder of the year for feedlots to work through the current inventory and we can’t be sure what additional impacts the drought may have in the coming months.
