Based on the USDA’s mid-year Cattle (Inventory) report, a further tightening in the supply of calves available for feedlot placement in late 2025 and early 2026 can be expected, the USDA said Monday in its monthly Livestock, Dairy and Poultry Outlook.
CATTLE HERD CHANGES POSSIBLE
The report also suggested steady but gradual changes to inventories of beef cows and replacement heifers. As a result, 2025 and 2026 beef production forecasts were reduced from last month.
The July Cattle on Feed report estimated that on July 1, 6.884 million steers and 4.240 million heifers were on feed, an increase of 1% and a decline of 5%, respectively, from a year earlier.
The ratio of heifers on feed July 1 fell for the second straight year and was the lowest since July 1, 2018, the USDA Outlook report said. However, the ratio and volume of heifers on feed remained well above levels during the transition from the prior to the current cattle cycle when the herd was changing from a contractionary to an expansionary phase.
Forecast cattle prices were raised significantly in the second half of 2025 and in 2026 on recent cattle price reports, strong beef prices and tighter cattle supplies.
Expected beef imports for 2025 and 2026 were revised downward as limited imports from Brazil were expected. Exports were revised downward in 2025 and 2026 on lower projected production.
PORK PRODUCTION SEEN LOWER
The USDA’s estimate of pork production for 2025 was reduced 1% from last month’s forecast to 27.7 billion pounds reflecting official data reported through the first half of the year, as well as a slower slaughter rate and reduced dressed weights in the third and fourth quarters.
July hog slaughter came up short of what was implied by the June Quarterly Hogs and Pigs report, the Outlook report said. Hogs slaughtered in July typically are categorized in the two heaviest weight categories in the June report: the 18- pounds-and-over category, which the report indicated was 1% below a year earlier, and the 120– 179-pound category, whose numbers in the June report were slightly higher than those of a year earlier.
July’s estimated federally inspected hog slaughter, however, was significantly below the report’s indications, at 10.2 million head, down 3.9%.
Third quarter national producer-sold hog prices were forecast at $77 per cwt, more than 17% higher than same-period prices in 2024, the USDA report said.
Pork export forecasts rebounded in June to 552 million pounds, up 5% from a year earlier.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $236.64 per cwt to $237.15, compared with last week’s range of $236.15 to $246.50 per cwt. FOB dressed steers and heifers went for $372.70 per cwt to $376.15, compared with $371.08 to $384.31.
The USDA choice cutout Monday was up $3.67 per cwt at $404.24 while select was up $6.38 at $377.14. The choice/select spread narrowed to $27.10 from $29.81 with 59 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $422.38 per cwt, and 50% beef was $180.11.
The USDA said basis bids for corn from feeders in the Southern Plains were steady to down $0.05 at $1.30 to $1.40 a bushel over the Sep corn contract, which settled at $3.83, down $0.00 3/4.
No live cattle delivery intentions were posted.
The CME Feeder Cattle Index for the seven days ended Friday was $342.17 per cwt, down $3.58. This compares with Monday’s Aug contract settlement of $348.90, up $2.75.