The relatively slow pace of slaughter in the first four months of 2024 contributed to the number of cattle on feed longer than 150 days on May 1 being the highest since May 2012, said the USDA’s monthly livestock, Dairy, and Poultry Outlook for June.
The 2024 beef production forecast was virtually unchanged as heavier cattle weights were expected to partially offset tight cattle supplies, the USDA said. The 2025 beef production forecast was raised with expectations of continued high cattle weights and a shift of marketings from late 2024 into early 2025.
The Outlook report said, some packers reportedly were foregoing discounts on cattle above certain weights.
THE RESULT
That incentivized feedlots to keep cattle on feed longer, especially since they maintain feedlot capacity utilization in the face of slowing placements, the Outlook report said. Thus, weekly steer and heifer carcass weights remain record high for this time of year.
For the week ended May 25, steer and heifer carcass weights were 37 and 29 pounds, respectively, above the same week a year ago, the report said. The additional weight enables packers to partially offset the effect of having fewer cattle to process than a year ago, as carcasses were yielding about 4% more.
The latest Cattle on Feed report estimated the May 1 feedlot inventory at 11.554 million head, about 1% less than the 11.654 million head in the same month last year, the Outlook report said.
NET PLACEMENTS DOWN
Feedlot net placements1 in April were 6% fewer year over year at 1.600 million head, the Outlook report said. April had two extra slaughter days than last year, which was reflected in marketings in April at about 10% more than a year ago to 1.872 million head.
As a result, on May 1 the number of cattle on feed more than 150 days declined month over month but was 12% more than a year ago, the Outlook report said. As a percent of total cattle on feed, this grouping is the largest for the month since May 2020, a time when packers were limited in their ability to process cattle.
Despite the high number of cattle on feed more than 150 days, there were fewer total cattle on feed than a year ago, the Outlook report pointed out. Although the heavier weights implied by the increased number of cattle on feed more than 150 days has partly offset lower cattle numbers, expected declines in both on-feed numbers and the proportion of cattle on feed for longer periods point toward declining supplies of beef.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $186.56 per cwt to $192.43, compared with last week’s range of $185.00 to $190.99 per cwt. FOB dressed steers, and heifers went for $291.73 per cwt to $301.67, compared with $291.77 to $304.06.
The USDA choice cutout Wednesday was up $0.18 per cwt at $320.70 while select was down $0.95 at $303.26. The choice/select spread widened to $17.44 from $16.31 with 106 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $366.58 per cwt, and 50% beef was $89.22.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.60 a bushel over the Jul corn contract, which settled at $4.50 a bushel, up $0.06 1/4.
No delivery intentions were posted Tuesday for the Jun live cattle futures contract.
The CME Feeder Cattle Index for the seven days ended Monday was $257.07 per cwt, up $1.35. This compares with Tuesday’s Aug contract settlement of $259.95, down $1.37.