February 27

In Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.7M head on Feb 1, down 4.1% from a year ago. New placements onto feedlots in January were down 3.6%, while marketings were up 4.2% - indicating strong demand against shrinking supplies. CME cattle futures set fresh 8-year highs at $165.20/cwt on Friday (2/24). Forward contracts for 2023 are averaging $163.83/cwt. In February’s WASDE, the USDA projected a huge 6.3% drop in beef production for 2023. Look for beef supplies to be depressed at least through 2025. The USDA raised its forecast 2023 cattle prices from $158.50 to $159.00/cwt, up 10.1% from $144.40 for 2022. That forecast will likely get bumped even higher in March’s WASDE. Seasonally, look for middle meat and ground beef prices to rise ahead of the “big 3” spring grilling holidays of Memorial Day (5/29), Father’s Day (6/18), and July 4th.