The consensus among cattle market analysts after Friday’s monthly USDA Cattle on Feed report and the semi-annual Cattle (inventory) report was that there were no big surprises.
The Cattle on Feed report revealed numbers that were so close to average pre-release estimates that traders who missed the mark either higher or lower will cancel each other out today when they try to catch up. The number of cattle placed into feedlots for final growth and fattening prior to slaughter even was on target with the average, in spite of a wide spread of estimates.
The mid-year cattle inventory number also was no shocker, analysts said. There was very little change in the numbers from the more-important Jan. 1 inventory report, indicating it’s a steady-as-she-goes attitude among cow/calf operators.
CATTLE INVENTORY UNCHANGED
The mid-year cattle inventory report showed that the total US cattle herd was steady with a year ago at 103 million head. This compares with the Jan. 1 inventory of 94.8 million head, which was up from 94.3 million a year earlier.
All cows and heifers that have calved, at 41.7 million head, were slightly fewer than the 41.8 million head on July 1, 2018. The number of beef cows, at 32.4 million, were unchanged from a year ago, and dairy cows, at 9.30 million head, were down 1% from mid-year 2018.
All heifers weighing 500 pounds or more on July 1, totaled 16.4 million head, 1% more than the 16.3 million a year earlier. Of these, 4.40 million were designated as replacement heifers, down 4% from a year ago.
Milk replacement heifers, at 4.10 million head, were down 2% from a year earlier, and other heifers, at 7.90 million head, were up 5% from a year earlier.
Market analysts have said the heifer category of the US inventory is the most unstable part of the total. At this time of year, their final destination, be it feedlot or herd cow, can change with market conditions by the fall, something that is harder to do with the Jan. 1 inventory.
HERD PEAK CONFIRMED?
The 2019 calf crop was expected to total 36.3 million head, down 0.3% from last year’s crop of 36.4 million. Calves born during the first half of this year were estimated at 26.5 million head, down slightly from the first half of 2018.
An additional 9.800 million calves were expected to be born during the second half of this year, compared with 9.803 million in the second half of last year.
The number of feeder cattle hovering outside of feedlots on July 1 came to 37.1 million head, up from 37.0 million a year ago.
The decline in the calf crop combined with the lack of substantial growth in the number of feeder cattle outside of the feedlots is telling, one analyst said. It shows a declining willingness among cow/calf producers to breed for and produce more calves for herd replacement or feedlots.
CATTLE, BEEF RECAP
Cash cattle traded in the Plains last week at $111 to $114.50 per cwt on a live basis, steady to down $0.50 from the previous week. Dressed-basis trading was reported at a steady $182 to $185.
The USDA choice cutout Friday was up $0.08 per cwt at $213.42, while select was up $0.90 at $189.51. The choice/select spread narrowed to $23.91 from $24.73 with 66 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Thursday was $138.67 per cwt, down $1.33 from the previous day. This compares with Friday’s Aug contract settlement of $139.97, up $0.55.