With more cattle available outside feedlots and a larger calf crop, the US will have ample numbers for feedlot placement into 2018, according to the USDA’s Livestock, Dairy, and Poultry Outlook.
Commercial beef production was forecast higher in 2018 to 27.4 billion pounds. The US beef export outlook for 2017 was revised slightly lower, and 2018 was left unchanged.
AMPLE FEEDER CATTLE SUPPLIES
The USDA’s National Agricultural Statistics Service Cattle Inventory report for July 1 estimated the US cattle herd expanded 4% from 2015 to 102.6 million head, the largest midyear total since 2008.
This year’s calf crop was estimated at 36.3 million head, 3.5% larger than in 2016 and 6.5% larger than in 2015. The Jan. 1 cattle and calves inventory was up 5% from 2015.
The number of beef cows was up almost 7% over the same period. The US cattle herd began the expansion phase of its production cycle during 2014.
The herd on July 1 was 6.9 million head, or 7.2% larger than in 2014. The estimate for 2017 commercial beef production was revised higher to 26.7 billion pounds, mainly because of relatively large second-quarter feedlot placements and their effect on fourth-quarter slaughter.
Based on the relatively large number of cattle available outside feedlots, it is anticipated that a greater number will be placed on feed in the second half to bolster commercial beef production in 2018, the Outlook report said. The 2018 forecast was raised to 27.4 billion pounds.
HEIFER RETENTION SLOWS
Although cattle herd growth implies increased availability of heifers for feeding, there also are signs of slower heifer retention.
Heifers in feedlots with 1,000-head or greater capacity on July 1 were up 10.6% from 2016, and thus far this year heifer slaughter is up nearly 4.0%. To some extent, this likely reflects a larger supply from herd expansion, but the number of heifers on feed as a percent of the total increased from 33.7% in 2016 to 35.6%.
The Cattle report also estimated that heifers retained for beef cow replacement were down 2% from 2015. Replacement heifers represented 14.5% of the cow inventory, lower than 2014-2015 but above the percentages of 2007-2012, a period of relatively strong cow liquidation.
A lower percentage of beef replacement heifers would tend to indicate a slowing in the expansion of the herd in 2018. To the extent that heifer retention has slowed, it will further increase feeder cattle supplies for placement on feed.
Based on the NASS Cattle report, 37.7 million head of cattle were estimated to be available outside feedlots on July 1, 1.6 million more than on the same date in 2015.
CATTLE, BEEF RECAP
There were no sales Wednesday on the livestock exchange video auction. A week earlier, cattle sold at $115.04 per cwt, down $0.96 from $116.00 the previous week. Cattle with 1- to 9-day delivery sold at $115.28, versus $116 the previous week. Those with 1- to 17-day delivery sold at $114.50, and cattle with 17- to 30-day delivery sold at $114.00.
Cash action was seen this week at mostly $110 up to $110.50 per cwt on a live basis, down $4 to $6 from last week, and at $175 to $177 dressed down $ to $10.
The USDA’s choice cutout Thursday was down $1.88 per cwt at $195.63, while select was off $0.84 at $194.20. The choice/select spread narrowed to $1.43 from $2.47 with 146 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $145.44 per cwt, up $0.95. This compares with Thursday’s Aug settlement at $140.47, down $1.77.