USDA’s newly launched “Cattle on Feed” report confirmed a listing of 11.6 million head on feed as of Could 1, 2023, a 3% decline from Could 1, 2022. This was largely in keeping with pre-report analyst estimates.
Placements in feedlots throughout April totaled 1.75 million head, 4% beneath 2022. Web placements had been 1.70 million head. Throughout April, placements of cattle and calves weighing lower than 600 kilos had been 360,000 head, 600-699 kilos had been 245,000 head, 700-799 kilos had been 410,000 head, 800-899 kilos had been 458,000 head, 900-999 kilos had been 205,000 head, and 1,000 kilos and better had been 70,000 head.
Marketings of fed cattle throughout April totaled 1.70 million head, 10% beneath 2022 and in keeping with analyst expectations.
Drought improves however influence lingers
Since October 2022, drought situations have improved for a lot of the U.S., in keeping with USDA’s newest “Livestock, Dairy and Poultry Outlook” report. As of Could 16, 41.36% of the U.S. continues to be experiencing some type of drought. The U.S. beef herd is in a core portion of areas nonetheless experiencing extreme drought situations. Though situations have improved for a lot of producers, USDA economists Russell Knight and Hannah Taylor say the influence lingers.
On Could 12, 2023, USDA Nationwide Agricultural Statistics Service (NASS) estimated hay shares on farms on Could 1 had been 13% beneath these of final 12 months, the bottom in a decade.
“Regardless of current rains, for some producers, the very low hay provides will not be adequate to offset poor pastures to maintain herds this summer season and permit producers to retain breeding inventory to rebuild their herds,” they word. “Because of this, the culling of beef cows continues at a comparatively excessive price.”
The tempo of month-to-month beef cow slaughter stays comparatively excessive, which may weaken the outlook for calf crops in late 2023 and 2024, they add. Whereas this has the potential to scale back cattle placements, feed costs are forecast to say no, probably enhancing returns for producers.
2024 beef manufacturing forecast to drop
In keeping with Knight and Taylor, the comparatively sturdy tempo of beef cow slaughter and comparatively giant placements of heifers in feedlots in 2022 and into early 2023 will probably yield a smaller year-over-year calf crop in 2023, tightening future cattle provides. It should additionally probably result in fewer cows and bulls within the slaughter combine in 2024. In the meantime, tighter forage provides heading into summer season 2023 and decrease feed costs will probably result in bigger placements of calves in feedlots.
All of this thought-about, USDA forecasts 2024 beef manufacturing to say no 8% from 2023 to 24.7 billion kilos. Knight and Taylor level out that 2024 will mark the second 12 months of decrease manufacturing following the record-large quantity set in 2022 and might be lowest manufacturing 12 months since 2015 when the sector started to rebuild following the drought of 2011-14.
Tighter cattle provides to push costs greater
Based mostly on current value knowledge in early Could and anticipated agency demand, USDA has raised its annual fed steer value to $166.50/cwt. in 2023, a 15% enhance from final 12 months. Knight and Taylor mentioned in 2024, packers will probably must bid greater for the shrinking slaughter-ready cattle provide. Costs are projected to common $172.00/cwt. for the 12 months.
Knight and Taylor say demand for feeder calves has proven vital energy this spring. In April, the weighted common value for feeder steers between 750–800 kilos on the Oklahoma Metropolis Nationwide Stockyards was recorded at $198.06/cwt., virtually $40.00 above April 2022. The feeder steer value reported on Could 8 reached $203.15/cwt., over $48 above the identical week final 12 months. Based mostly on current value knowledge and declines in forecast corn season common costs, USDA forecast an annual feeder steer value of $205.40/cwt., which is 24% greater than final 12 months. Waiting for 2024, Knight and Taylor say demand for feeder calves will proceed with fewer calves and decrease feed enter costs. USDA forecast an annual forecast of $221.00/cwt., an 7% year-over-year enhance.
On the cull cow aspect, USDA is forecasting $99.20/cwt. for 2023, a rise of 26% from 2022. In 2024, a decline in cull cow slaughter is anticipated to elevate costs to $113.00/cwt., 13% greater than 2023.
