December 21

12/21 – In Friday’s Cattle on Feed report, the USDA said that new placements onto feedlots in Nov. were down 8.9% from a year ago, following an 11.0% decline in Oct. feedlot inventories at 12.04M head have declined to year ago levels. With feed costs elevated, economics favor keeping animals off-feed where possible. Covid uncertainty is making planning difficult. The level of resurgence in cases this winter will affect both foodservice demand and the potential for another round of plant closures. Come Spring 2021, cattle supplies look to be tighter and prices higher. Cattle futures that averaged $125.17/cwt in Jan., and plunged to $83.83 in April, have rebounded to $110.47/cwt. Forward contracts for 2021 are averaging $115.98, up 9.9% from a projected $105.57/cwt for 2020. The April 2021 contract is trading at $118.65 vs. a virus-decimated $90.38/cwt (April avg) in 2020.