While a ban on cattle from Mexico because of the discovery of New World Screwworm in Mexico’s state of Chiappas is set to be lifted partially next week, a full resumption of trade remains pending. But the ban created a dent in available US feeder cattle supplies that still has to be worked out.
The USDA’s monthly Livestock, Dairy and Poultry Outlook report Thursday took that into consideration when it made predictions for US cattle and beef supplies for this year.
Q4 PRODUCTION ADJUSTED UPWARD
Based on daily and weekly estimated slaughter data for November through early December, steer and heifer slaughter was slightly faster than expected, which was offset partially by a slower-than-expected pace for bulls, the report said. These data also show slightly heavier carcass weights than expected last month.
The forecast for fourth-quarter 2024 beef production was moved higher by 10 million pounds from last month to 6.930 billion pounds, a 2% increase from last year, the USDA said. The annual total was updated to 27.035 billion pounds, an increase of 0.3% from last year.
FEWER PLACEMENTS
The import ban reduced the anticipated cattle placements for the last week of November and December, partially offsetting estimates of larger-than-expected October placements shown in the November Cattle on Feed report from the USDA’s National Agricultural Statistics Service.
According to the report, the Nov. 1 feedlot inventory was estimated at 11.986 million head, less than 1% more than the 11.956 million in the same month last year, the Outlook report said. Feedlot net placements1 in October were more than 5% higher year over year at 2.231 million head.
October marketings tallied 1.845 million head, also up nearly 5% from a year ago, the report said. The year-over-year increase in marketings reflected one more available weekday of slaughter compared to last year, which kept the per-day marketings on par with last year.
Although total inventory was up, Texas, Kansas and Arizona had fewer cattle on feed than a year ago, the report said. This was the first time since mid-2023 of consecutive months of cattle on feed over 150 days that were less than a year ago in total number of head and percentage.
With the Mexico import prohibition in place, anticipated 2025 placements were cut, the USDA said. As a result, when compared to last month’s expectations, fed cattle slaughter was anticipated to decline further in the second, third and fourth quarters of 2025.
The outlook for 2025 beef production was lowered 615 million pounds from last month to 25.665 billion pounds, a 5% decline year over year, the USDA said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $199.88 per cwt to $208.09, compared with last week’s range of $197.00 to $201.40 per cwt. FOB dressed steers, and heifers went for $312.04 per cwt to $319.47, compared with $304.49 to $315.25.
The USDA choice cutout Thursday was down $0.73 per cwt at $333.41 while select was up $1.34 at $319.38. The choice/select spread narrowed to $14.03 from $16.10 with 106 loads of fabricated product and 36 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $351.36 per cwt, and 50% beef was $112.28.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.20 to $1.35 a bushel over the Mar corn contract, which settled at $4.74 1/2, down $0.04 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $278.31 per cwt, up $0.27. This compares with Thursday’s Jan contract settlement of $273.45, down $1.77.