May 23

5/23 – Friday’s Cattle on Feed report confirmed historically large numbers of cattle awaiting slaughter over the next few months. The USDA said feedlot inventories, at 11.97M head on May 1, were up 2.0% from a year ago. Multiple years of drought and high feed costs have prompted ranchers to liquidate herds and to push pasture-feeders onto feedlots at younger ages. While new placements in April were down 0.9% from 2021, they were still 5% above the 5-year average. Beef has had a lackluster spring with prices high, but below expected levels. Lean 90s trimmings have declined from a high of $2.88 in March to $2.74 (5/20); 50s trim from $1.34 to $.99. Cattle hit 7-year highs of $144.10/cwt (4/21) and have since declined to $131.57 (5/20). But we aren’t nearly out of the woods on beef. Forward futures for 2023 are averaging $149.31/cwt and tight cattle supplies look to be with us through 2025.