Through May, beef cow slaughter for the year-to-date is 15% higher. While some drought reduction has improved pasture conditions, range and pasture conditions remain at the worst level ever for this time of year.
As we move into June, cattle markets are transitioning into summer mode, reflecting seasonality and a myriad of other factors which are currently impacting markets.
Global beef trade is projected to continue expanding to new record levels in 2022. The top four beef exporting countries represent about 60 percent of the 2022 projected global total in the USDA report.
Spring green-up has been muted by the ongoing drought and each passing week is critical and by any measure, the U.S. is in the worst condition now of any May in at least the last 35 years.
The ongoing drought continues to squeeze available hay supplies and drought this year is a severe threat to 2022 hay production. May 1 hay stocks in the 17 plains and western states were down 17.7 percent year-over-year.
Boxed beef prices have come down from a period of extremely strong demand and adjusted down from a counter-seasonal January peak to current levels, 11.2 percent lower compared to the last week of January.
The fast pace of cow slaughter thus far implies the likelihood of significant beef cow herd liquidation in 2022. The next few months will likely have impacts on the cattle industry for several years.
The number of heifers on feed does not suggest heifer retention for herd expansion, and the current pace of cow slaughter suggests the beef cow herd could decline up to four percent in 2022.
China/Hong Kong continues to grow as the largest beef importer in the world. Beef imports into China/HK are forecast to increase in 2022 and account for over 35 percent of global beef imports.
Global beef production is projected to expand in 2022 with increased production in Brazil, China, India, Australia and Mexico offsetting decreased production in the U.S., Canada, the European Union (E.U.) and Argentina.
