August 21

8/21 - In Friday’s monthly cattle report, the USDA said feedlot inventories were 11.03M head on Aug 1, down 2.3% from a year ago. New placements onto feedlots in July were down 8.3%, and July marketings were down 5.3%. Beef cow herd numbers are at a 52-year low – with no signs that ranchers are planning to expand anytime soon. The number of beef replacement heifers in the mid-year inventory report was at a 50-year low of 4.05M head. The percentage of heifers in feedlots and headed to slaughter is at a 22-year high of 39.9%. We may not see a significant increase in domestic beef supplies until 2027. In this month’s WASDE, the USDA projected a 4.6% drop in beef output for 2023, and a sharper 6.7% decline in 2024. CME cattle futures set a record high on 6/30/23 at $181.50/cwt and remain elevated at $178.27 (8/18). Forward futures for the 1st half of 2024 are averaging a record-high $187.23.