Second-half 2020 forecasts for beef production were increased from last month on a faster-than-anticipated slaughter pace, the USDA’s World Agricultural Outlook Board said in its monthly Outlook report.
The anticipated increase in slaughter raised the annual beef production forecast to 27.0 billion pounds, the Outlook report said. The 2021 production forecast was lowered to 27.6 billion pounds on fewer expected placements in first-half 2021, which will reduce fed cattle slaughter in the second half of the year.
Fed steer and feeder steer prices in 2020 and 2021 were raised on recent price data and improved feeding margins, the report said.
June’s beef imports rose 15% from last year to 309 million pounds, the report said. The forecast for second-half 2020 imports was revised upward on firm demand for processing-grade beef, as was the 2021 import forecast.
US beef exports in June totaled 183 million pounds, 33% less than a year earlier, the report said. The third- and fourth-quarter beef export forecasts, along with the 2021 annual forecast, were unchanged.
CATTLE HERD TOPPING
July’s mid-year Cattle (Inventory) report from the USDA’s National Agricultural Statistics Service estimated the US cattle herd at 103.0 million head, up only slightly from a year ago, and showing a leveling of the total US herd size, the Outlook report said.
The mid-year Cattle report provides a snapshot of the US inventory, as well as a glimpse into cow/calf producer intentions for retaining heifers.
Inventory estimates in all categories were at or above last year except for beef cow and calf crop estimates, which were decreased for calves under 500 pounds at midyear, the Outlook report said. Although this marks consecutive growth at midyear since 2014, this year’s increase reflects the effect of Covid-19 on meatpacking facilities’ inability to maintain slaughter levels in second-quarter 2020.
Reduced slaughter levels slowed the pace of marketings, leading to the same number of cattle remaining in feedlots of all sizes as in the prior year, 13.6 million head, the Outlook report said. This also had the effect of increasing the number of cattle outside feedlots.
The ERS estimated the number of cattle available for placement in feedlots at 37.4 million head, larger by 300,000 head, or 0.8%, than at this time last year, the Outlook report said.
Although the number of beef cows was 250,000 head and 0.8% fewer than a year ago at 32.1 million head, the number of dairy cows was estimated at 50,000 head and 0.5% more than a year ago at 9.4 million, the Outlook report said. The calf crop was estimated to be only fractionally below a year ago at 35.8 million.
The ERS estimated that 2,7 million, or 7.6%, more beef heifers entered the herd in the first half than last year, but second-half replacements would be about steady at 4.4 million.
CATTLE, BEEF RECAP
Fed cattle trading was reported in the Plains this week at $106 to $109 per cwt on a live basis, up $3 from last week. Dressed-basis trade was steady at $168.
The USDA choice cutout Wednesday was up $2.18 per cwt at $223.04, while select was up $1.00 at $205.65. The choice/select spread widened to $17.39 from $16.21 with 112 loads of fabricated product sold into the spot market.
No steer or heifer contracts were tendered for delivery Wednesday against the Aug live cattle futures contract.
The CME Feeder Cattle Index for the seven days ended Tuesday was at $142.62 per cwt, unchanged. This compares with Wednesday’s Aug contract settlement of $143.55 per cwt, up $0.32.