October 29, 2024
US cattle on feed remains robust, despite decline in cattle inventory
Amid a sharp decline in US cattle inventory, now at its lowest in 73 years, the number of cattle on feed remains unexpectedly robust.
Over the past seven months, beef retail prices reached record highs in six of them, even as the cash prices paid to farmers fell from July through September 2024. While recent weeks have seen cash prices recover, emerging drought conditions are contributing to growing uncertainty in cattle markets.
Without the July report, which typically provides midyear estimates on cattle inventory and calf crop numbers, the USDA's January Cattle Inventory report is highly anticipated by farmers and market stakeholders alike.
Today's monthly Cattle on Feed report from the USDA reveals that as of October 1, 2024, the total cattle and calves on feed stood at 11.6 million head, slightly below last year's levels. The report also indicated that placements of cattle on feed reached 2.16 million head, down 2% from October 2023, while marketings of fed cattle totalled 1.7 million head, a 2% increase compared to the previous year.
The figures suggest a sufficient supply of fed cattle for packers, a factor that typically suppresses cash prices. However, if the trend of placements falling below marketings continues, it may lead to a reduction in cattle on feed. Strong production estimates align with this scenario, while weather conditions could play a critical role in determining cattle placements over the next six months.
In USDA's October Livestock Slaughter report, September beef production totalled 2.2 billion pounds, marking a 3% rise from last year. This production volume came from 2.57 million head of cattle, representing a slight decrease of 1% from a year prior. The average live weight was at a record high of 1,406 pounds, which is 44 pounds heavier than in September 2023.
September slaughter volume saw heifers and cows making up about 47.8% of the total, a reduction from 51% in September 2023. This shift may indicate some retention of female cattle. However, emerging dry conditions, as noted by the U.S. Drought Monitor, are raising concerns. The National Oceanic and Atmospheric Administration reports a 60% likelihood of a La Niña event, which could bring drier weather to major cattle-producing regions. This may increase female cattle slaughter, possibly contributing to further inventory contraction in 2025.
- American Farm Bureau Federation