USDA’s June 22 Cattle on Feed report put cattle and calves on feed for the slaughter market for June 1 at 11.6 million head, down 5,000 head from May, but up 457,000 head, or 4 percent, over prior-year levels.
Despite increased beef production in 2018, up nearly 4% so far this year, beef demand has been quite strong and has limited beef and cattle price pressure in the first half of the year.
Despite increased beef production in 2018, up nearly 4% so far this year, beef demand has been quite strong and has limited beef and cattle price pressure in the first half of the year.
Looking at the same 8-week period in sales, we can see that packers have done a good job of moving product through forward sales of boxed beef with delivery dates of 21 to 90 days out.
Corn prices have been on a sharp downtrend since late May due primarily to a combination of trade uncertainty and a strong start to the growing season.
Additional cattle are continuing to come to feedyards, but fortunately there’s been several market factors at play to help offset beef supplies, at least for now, said Craig VanDyke, Top Third Ag Marketing.
Packers have leverage on cattle feeders due to several market ready cattle being available, but cattle feeders being current with marketing and stronger live futures provide them short term wiggle room.
In three weeks, live cattle prices declined $14 to $15 per hundredweight which goes without mentioning that prices this week are $26 per hundredweight lower than the same week one year ago.
U.S. cattle futures rose on Friday, shrugging off earlier declines on technical buying and support from government data showing fewer cattle placed in feedlots during April, traders and analysts said.
U.S. beef packers including Tyson Foods and Cargill are racking up historically high margins, thanks to slumping cattle prices amid a supply glut and as Americans turn to beef for their backyard summer barbecues.