In Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.6M head on March 1, down 4.5% from a year ago. New placements onto feedlots in Feb were down 7.2%. In March’s WASDE, the USDA projected a huge 6.0% drop in beef production for 2023. The USDA raised its forecast 2023 cattle prices from $159.00 to $162.00/cwt, up 12.1% from $144.40 for 2022.
Read MoreFollowing multiple years of drought, the transition from a La Nina to an El Nino weather pattern is expected to bring welcome precipitation to the Midwest corn belt this spring/summer. So far, the USDA hasn’t made any adjustments to its corn balance sheets.
Read MoreWith cattle futures setting new 8-year highs last week at $167.50/cwt on 2/28, and beef supplies looking to be constrained for the foreseeable future, the restaurant industry will need to rely on alternative proteins for some food-cost relief.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.7M head on Feb 1, down 4.1% from a year ago.
Read MoreBeef markets look to be quite challenging in 2023 and 2024. In Jan’s annual cattle inventory report, the USDA said that total U.S. cattle numbers were 3% below a year ago and the lowest since 1962. The USDA expects beef production for 2023 to be 6.3% below a year ago. Looking ahead, a developing El Nino weather pattern should bring more moisture this spring to both crops and grazing pasture.
Read MoreButter prices were out-of-sight in 2022, hitting a record-high $3.2675 per pound in Oct and averaging $2.87 for the year, up 65.5% from $1.73 in 2021. Butter production in 2022 was down 0.7% from 2021 and 10.1% below 2020 output. But cold storage stocks at the end of Dec were 8.1% above year-ago, suggesting high prices suppressed at least some demand - and that there is enough supply to keep prices relatively tame.
Read MoreA big boost to Q4 2022 broiler output has pushed Jan 1st (2023) cold storage supplies to 25.4% above a year ago. Producers were finally able to significantly increase output – but at a time when sky-high retail prices were turning off consumers and demand was falling. Breaking it down: wing inventories were up 11%; whole birds up 14%; leg quarters up 22%; and breast meat 63% higher than last year, albeit coming off 9-year lows to start 2022.
Read MoreU.S. GDP growth was 2.9% for Q4 2022, following 3.2% growth in Q3 2022. Those are great numbers after several years of Covid, supply shocks, war, and inflation. What’s next? The U.S. will flirt with recession for most of 2023 as a result to the Fed’s (inflation-fighting) interest rate increases. We’re only not in a recession right now because of a resilient labor market and unexpectedly lower energy prices.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.68M head on Jan 1, down 2.9% from a year ago. New placements onto feedlots in Dec were down 8.0%. Heifers (breeding stock) accounted for 39.8% of feedlot inventory, far exceeding the 36% threshold that historically indicates herd liquidation. CME cattle futures set fresh 8-year highs at $158.50/cwt on 12/29/22 and remain high at $156.62 (1/20/23).
Read MoreHighly Pathogenic Avian Influenza (HPAI or Avian Flu) claimed the lives of nearly 58M U.S. birds in 2022 - mostly turkeys & egg layers - and that trend will likely continue in 2023. Effective vaccination exists. Unfortunately, trade barriers that would exclude vaccinated U.S. poultry from several important foreign markets have discouraged domestic vax usage.
Read MoreMaking a call on the economy for 2023 has recently gotten even more difficult, in a good way. U.S. employers added a very impressive 223,000 net new jobs in December. The jobless rate dropped from 3.6% to 3.5%. And, while a number of financial and tech giants have announced large layoffs, most of these companies had staffed-up during the pandemic and are now just trimming back to 2019/2020 levels.
Read More2022 was an ugly year for commodities. The La Niña climate pattern precipitated a 3rd straight year of drought, cutting U.S. crop yields and scorching cattle pasture. Avian Flu decimated egg layers and turkey flocks. The Ukraine war stoked prices for crude and refined oil products. For 2022, cattle prices were up 11.4%, winter wheat +12.1%, corn +13.4%, diesel +27.4%, turkey breast +133.1% and large shell eggs ended the year 189.1% higher than where they started.
Read MoreIn Friday’s (pre-holiday) cattle report, the USDA said feedlot inventories totaled 11.67M head on Dec 1, down 2.6% from a year ago. New placements onto feedlots in Nov were down 2.1%. Meanwhile, beef demand remained strong with cattle marketings up 1.2% from a year ago in Nov. That combination (and trend) of smaller on-feed supplies, lighter placements, and strong marketings should be bullish for cattle prices.
Read More‘Twas the night before Christmas, and all through the White House, not a creature was stirring, when the Pres did arouse. Still dreaming of midterms and Herschel and Lake, the news was too good, it had to be fake. Then up on the roof there rose such a clatter, Joe sprang from his bed to see what was the matter. When what to his wondering eyes should appear, ‘twas Santa alone, no sleigh and no reindeer.
Read MoreIt’s a holiday miracle! Just in time for the peak shopping season, crude oil and gasoline prices have plummeted – giving inflation-weary consumers a welcome reprieve. WTI crude oil hit a 2022 low at $71.02 per barrel on Friday (12/9). Gasoline prices at $3.28 per gallon (AAA national average) are now below a year ago, down from $3.79 per gallon just a month ago, and light-years below the high of $5.01 in June.
Read MoreCME cattle futures set fresh 7-year highs on Friday (12/2), closing at $153.35/cwt. The USDA is forecasting 2023 cattle prices to average $164.00/cwt, up 8.2% from $144.15 for 2022. Beef supplies look to be tight through 2025. The USDA is projecting a cattle liquidation-driven 1.4% increase in beef output for 2022, followed by a huge 7.3% production drop in 2023.
Read MoreLogistics costs have improved dramatically in 2022 – but, unfortunately, for all the wrong reasons: the high potential for a global recession, Covid lockdowns in China (that are curbing oil and shipping demand), and faltering U.S. retail demand. WTI crude oil futures, which peaked in March at $123.70 per barrel, and averaged $104 for 6 months this year (Mar-Aug), closed at $76.28 on Friday (11/25).
Read MoreIn Friday’s cattle report, the USDA said feedlot inventories totaled 11.71M head on Nov 1, down 2.0% from a year ago. New placements onto feedlots in Oct were down 6.1%. Drought has been the driving factor, burning-up pastures and forcing producers to liquidate feeders at younger ages and lighter weights. Drought-stricken states appear to be tapped out on new placements.
Read MoreThe U.S. survived the mid-term elections with no major problems or fraud accusations. Despite Joe Biden’s low poll ratings and questionable fiscal policy, there was no “red wave” of rejection – nor much of a blue ripple of support. Consider it a victory for “purple” Americans mostly voting the issues of inflation, abortion, crime, and immigration.
Read MoreThe long-awaited rebound in chicken production finally arrived in September. Chicken in cold storage on Oct 1 was up 4.9% from Sept 1 and 18.5% above a year ago. The broiler hatchery flock is above year ago levels. Chicks placed for grow out are running 4.3% above a year ago since Aug 1. The USDA is forecasting Q4 chicken output to be up 3.2% from a year ago.
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