The USDA-Economic Research Service’s forecast for 2021 commercial beef production was raised fractionally from last month to 27.832 billion pounds on robust cow slaughter and heavier carcass weights.
August’s beef imports totaled 332 million pounds, down 5.4% from a year ago. The 2021 annual forecast for beef imports was raised to 3.187 billion pounds from a month ago.
August’s beef exports set a new high of 325 million pounds, up 21% from the previous year. The 2021 annual forecast for beef exports was unchanged from last month at 3.414 billion pounds.
HEAVIER CARCASSES, MORE COWS
Total 2021 beef production was raised from last month on anticipated heavier carcass weights and higher cow slaughter. Based on the average of the weekly weights reported in the Agricultural Marketing Service’s Actual Slaughter Under Federal Inspection reports through the week ending Sep. 25, the estimated average cattle carcass weight was 829 pounds, seven pounds more than average carcass weights for the first four weeks of August but 14 pounds less than the similar period in September 2020.
Dressed weights for steers and heifers also were heavier in September than in August. According to the National Agricultural Statistics Service’s Livestock Slaughter report, the estimated pace of beef and dairy cow slaughter for August was 6% more than a year ago, and estimated cow slaughter in the first four weeks of September was almost 7% more than in 2020.
Cow slaughter this year has been above 2020 levels from the week ending April 10 through the week ending Sep. 25, with the exception of the week ending June when it was about 14,000 head fewer than a year ago.
The increase in cow slaughter likely is because of weaker margins in the dairy sector, which is affecting herd decisions and concerns about forage availability and continued drought in parts of the country, the Outlook report said. These conditions were expected to result in increased fourth-quarter cow slaughter.
2022 PRODUCTION FORECAST RAISED
The 2022 annual beef production forecast was raised 120 million pounds from September to 26.995 billion pounds on higher anticipated cattle slaughter. Dry conditions were expected to support relatively large placements in the second half of 2021, supporting a higher forecast of fed cattle slaughter in 2022.
However, second-half 2022 production will reflect lower placements as a result of expected tighter supplies of cattle outside feedlots.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $124.22 to $125.24 per cwt, compared with last week’s range of $123.12 to $125.00. FOB dressed steers and heifers went for $195.78 to $196.35 per cwt, versus $193.39 to $196.04.
The USDA choice cutout Monday was down $0.15 per cwt at $280.09, while select was off $0.81 at $259.81. The choice/select spread widened to $20.28 from $19.62 with 80 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.10 to $1.20 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.32 3/4 a bushel, up $0.07.
No new contracts were tendered for delivery against the Oct live cattle contract Monday. Twenty heifer and 11 steer contracts were retendered for delivery at one. Twenty more heifer contracts were retendered at two.
The CME Feeder Cattle Index for the seven days ended Friday was $153.90 per cwt up $0.55. This compares with Monday’s Oct contract settlement of $155.75 per cwt, down $1.82.