Cattle Outlook
According to the latest Cattle on Feed report published by NASS, the December 1 feedlot inventory is estimated at 12.006 million head, almost 3 percent above 11.693 million head for
Ratio of Heifers and Beef Cows in Slaughter Mix Near-Record in 2023
Although USDA, National Agricultural Statistics Service (NASS) commercial slaughter estimates for the month of December 2023 will be published later this month, USDA, Agricultural Marketing Service (AMS) has published Actual Slaughter Under Federal Inspection through the end of the year, which allows for comparison of year-to-year slaughter. In 2023, all classes of slaughter were down from the prior year. However, the proportion of heifers and cows in the slaughter mix was higher than anticipated a year ago. The expectation was that as drought from 2020–22 largely receded, pasture conditions improved, and calf prices rose, producers would be more willing to retain heifers and cows to maintain or expand their herds. The chart below shows heifer and beef cow slaughter as a percent of total cattle slaughter under Federal inspection. At 42.1, last year was the second-highest average weekly percentage since the series began in 1986, behind the record set last year at 42.3.
Reflecting preliminary slaughter data for the month of December, fourth-quarter 2023 production is raised from last month. The change reflects a marginal increase in fed cattle and bull slaughter from last month’s forecast. That increase was partially offset by less cow slaughter. The largest impact to the forecast was an adjustment in carcass weights. Heavier carcass weights likely reflect a relatively large proportion of steers and heifers in the slaughter mix and general weight gains by steers and heifers coming out of feedlots. As a result, total commercial beef production in 2023 is estimated to have been 26.967 billion pounds, a decline of almost 5 percent from 2022.
Production Forecast Raised for 2024
According to the latest Cattle on Feed report published by NASS, the December 1 feedlot inventory is estimated at 12.006 million head, almost 3 percent above 11.693 million head for December 1, 2022. Feedlot net placements1in November were nearly 2 percent lower year over year at 1.814 million head. Marketings in November tallied 1.751 million head, down over 7 percent from a year ago. The relatively large decline in marketings kept most feedlots fuller than a year ago. In the three largest cattle feeding States, on December 1, 2023, the number of cattle on feed in Texas and Kansas is up 4 and 7 percent from last year, while Nebraska is down 1 percent.
On January 31st, USDA, NASS will release the semi-annual Cattle report. This report will provide estimates of cows and heifers available for breeding, as well as insight into calves available for placement in feedlots in early 2024 that will be marketed later in the year.For 2024, the beef production forecast is raised 120 million pounds from last month to 26.110billion pounds, a decline of just over 3 percent from 2023. In the first half of 2024, the production forecast is largely raised on higher anticipated fed cattle marketings based on higher-thanexpected placements in November and December. In addition, relatively heavy cattle weights reported in December are carried into 2024.
Cattle Prices Start 2024 Higher Than Last Year
In December, the weighted-average price for feeder steers weighing 750–800 pounds at the Oklahoma City National Stockyards was $220.73 per hundredweight (cwt), a $6.10 decline from November. In the first sale of the new year on January 8th, feeder steers averaged $215.79 per cwt, a decline of almost $8 from the previous sale on December 18th but more than $37 above the same week last year.
For 2023, feeder steers averaged $218.69 per cwt, a 32-percent increase from 2022. Although the second- and third-quarter price forecasts were raised slightly, the 2024 annual price forecast is unchanged at $242 per cwt, 11 percent higher than 2023. This acknowledges the strong placements in the last part of 2023 and expectations for tightening supplies of feeder cattle outside feedlots throughout 2024. The Cattle report to be released on January 31 will provide a picture of the supplies of feeder cattle outside feedlots available to be placed throughout this year.
The December average price for fed steers in the 5-area marketing region was $170.69 per cwt,$8.07 lower than November. In 2023, fed steers reached $175.54 per cwt, a 22-percent increase from 2022. In the first week of 2024, prices averaged $174.01 per cwt, more than $16 above the same week last year. The 2024 price forecasts are unchanged from last month, with the annual price at $178 per cwt, almost 2 percent higher than 2023.