The Cattle report issued by USDA confirms that cyclical herd expansion in the U.S. is over. The numbers indicate that while cattle inventories have stopped growing no major liquidation is underway.
The new year brings with it several changes in ongoing market dynamics, some new opportunities, and some new risks and continuing challenges for cattle and beef markets.
No matter how cow-calf producers judge the past year – good, just okay or disappointing – there is value in taking some time to analyze the reasons for the outcome.
Sharply higher carcass weights have boosted beef production, though another round of winter weather hitting parts of cattle feeding country may temper that in the last few weeks of the year.
Severe weather inevitably means management challenges and higher costs for producers but may also have market impacts if poor conditions are widespread enough.
USDA’s cattle on feed report counted 11.83 million head on feed, which is 101.2% of last year and up 4.8% from October as feedlot inventories increase to a seasonal peak.
Preconditioning programs add value to cattle and the value is consistently reflected in premiums for certified preconditioned calves sold under specific programs.
Boxed beef prices increased about ten percent over the month of October into early November, a significantly higher increase than the normal seasonal bump.
Friday’s USDA cattle on feed report pegged heifer numbers at 39.1 of feedlot inventories, the highest percentage in more than 18 years, and year-to-date heifer slaughter is up more than 7%.
Agricultural markets will be impacted by world population growth, economic growth and the expanding middle class, African Swine Fever and the development of alternative proteins.
