October 25

10/25 - In Friday’s Cattle on Feed report, the USDA said feedlot inventories, at 11.6M head on Oct 1st, were down 1.4% from a year ago. New feedlot placements in Sept were 2.9% below 2020 levels. We are in the 3rd year of a liquidation and contraction cycle for cattle herds that is being compounded by this year’s drought. The number of heifers not retained for breeding in Sept was up 1.8% from a year ago and now represents 38.8% of the slaughter mix. In its October WASDE, the USDA lowered 2021 beef output from 2.6% to 2.4% above a year ago, while projecting a 3.0% decline in 2022. Per capita 2021 U.S. beef supply is forecast to be down 0.2%, due to lower imports and increased exports. Cattle futures at $124.10/cwt (10/22) are running 15.2% above a 5-year avg of $107.74. Feb 2022 futures are $133.50/cwt; April 2022 are $136.55; Dec 2022 are $137.27.