Per capita red meat and poultry disappearance—often used as a proxy for consumption—is forecast to fall 1% in 2024, mainly the result of an 8% decline in per capita beef disappearance, said the USDA’s Economic Research Service in its June Livestock, Dairy, and Poultry Outlook.
PRODUCTION DOWN
The main component of the disappearance calculation is domestic production, though net trade and stocks also are factors, the USDA said. Beef production was forecast to decrease more than 8% as US cattle supplies tighten.
A very slight decrease in pork production, combined with higher expected exports, resulted in a very small decrease in the forecast for lower per capita disappearance.
Broiler and turkey production were forecast to increase by 2% and 5%, respectively, the report said. Per capita disappearance of broilers and turkey was forecast to increase in 2024, though not enough to offset the decrease of beef and pork disappearance.
FEEDER CALF DEMAND UP
Data from the US Drought Monitor as of June 6, showed about 22% of the US was experiencing drought, but 40% of the US beef herd remains under drought conditions, the USDA said. Although conditions have improved since early May for many producers in the Plains, pasture conditions in the Midwest have declined.
With generally improving pastures and lower expected feed costs this year, the demand for feeder calves is well supported, the report said. This demand likely is reflected in higher year-over-year cumulative feeder and stocker receipts in April and May published by the USDA’s Agricultural Marketing Service in the weekly report National Feeder and Stocker Cattle Summary.
That growth in receipts comes despite the smaller year-over-year supply of cattle and calves on April 1 that were available for placement in feedlots or within stocker operations, the USDA said. April 1 supplies of cattle available for placement were 18.8 million head—down 465,000, or 2.4%, from last year.
Based on the latest Cattle on Feed report, feedlot net placements in April were 4% less than last year at 1.697 million head, the Outlook report said. The decline was lower than expected, which supported an increase in the forecast for second-quarter 2023 placements, reflecting an expectation of a greater proportion of the feeder cattle outside feedlots to be placed and the earlier placement of some calves that might have been placed during third-quarter 2023.
That increase in placements raises expected fed marketings later this year and into early 2024.
Higher expected fed cattle marketings and cow and bull slaughter, as well as higher expected carcass weights in the second and third quarters, raised the outlook for 2023 beef production from last month by 165 million pounds to 27.1 billion pounds, the USDA said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $180.00 per cwt to $191.90, compared with last week’s range of $177.80 to $188.00 per cwt. FOB dressed steers, and heifers went for $284.05 per cwt to $298.16, compared with $269.90 to $294.94.
The USDA choice cutout Thursday was up $3.01 per cwt at $342.07 while select was up $0.32 at $309.58. The choice/select spread widened to $32.49 from $29.80 with 76 loads of fabricated product and seven loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.65 to $1.75 a bushel over the Jul corn contract, which settled at $6.23 1/4 a bushel, up $0.15 1/2.
No deliveries were tendered against Jun live cattle Thursday.
The CME Feeder Cattle Index for the seven days ended Wednesday was $227.69 per cwt, down $0.57. This compares with Thursday’s Aug contract settlement of $234.12 per cwt, down $1.77.