September 26

9/26 - In Friday’s cattle report, the USDA said feedlot inventories totaled 11.28M head on Sept 1, up 0.4% from a year ago. New placements onto feedlots in Aug were also up 0.4%. Drought continues to be the driving factor, forcing producers to liquidate feeders at younger ages & lighter weights, while also unloading breeding inventory (heifers). Sept could be more of the same, then we fall off a cliff on new placements for the next year or two. In Sept’s WASDE, the USDA projected a slim, 0.2% increase in beef output for 2022 followed by a 6.0% drop in 2023. The USDA forecast 2023 cattle prices to average $154.00/cwt, up 7.8% from $142.80 for 2022. Cattle futures set a fresh 7-year high last week at $146.30/cwt on 9/19 and closed the week at $144.25 on 9/23. Supplies look to be lower through 2025. Any major break in beef prices would have to come from a drop in demand.