USDA: Second-Half Beef Production Near 2014

Expected lower first-half feedlot placements notwithstanding, second-half beef production is expected to be near 2014 levels because of longer feeding times for steers and heifers, heavier dressed weights for all cattle and more steers and dairy cows in the slaughter mix.

The USDA also thinks more cattle remained on wheat pasture a little longer this year, resulting in larger feeder cattle going to market, which in turn will augment total 2015 beef production.

Southern Plains pastures had enough moisture to remain in relatively good shape, the USDA said in its quarterly Livestock, Dairy and Poultry Outlook report Tuesday.  Thus, cattle were able to stay on wheat into mid-March.

That could lead to second-quarter net feedlot placements being slightly more than last year.  However, possible year-over-year gains in second-quarter placements were not expected to make up for first-quarter declines, leaving first-half placements below a year-ago.




Besides the heavier fed-cattle dressed weights, total USDA cow dressed weights are expected to rise with the addition of more dairy cows to the mix.  This likely will not be enough to push first-half beef production above a year ago, but it could be close.

First-half 2015 beef production was estimated at 11.8 billion pounds, compared with 12.1 billion in 2014, the USDA said.

Heavier placement weights last fall and winter might imply more first-half beef production this year, but declining cow slaughter and moderating carcass weights in the second half point to less beef production in that period.

Total beef production also is being helped by having a larger percentage of steers in the slaughter mix, likely the result of heifers being held back for breeding.  January slaughter, for instance, had 649,300 heifers, compared with 751,500 a year earlier.  This represents 35% of January-2015 steer and heifer slaughter compared with 37% a year earlier.

Thus far in 2015, commercial cow slaughter is down 11% and consists of a higher percentage of dairy cows.  Because of their larger size, this shift has resulted in higher average dressed weights.  Beef cow slaughter is down by 24%, leaving total commercial cow slaughter down by 11%.




Beef is at a disadvantage in terms of expected consumer purchases as the price spread between beef and pork or chicken widens, the USDA said.  Wholesale price disparities likely will influence which products are featured in weekly retail grocery advertisements.

Annual per-capita beef consumption was pegged at 53.9 pounds, compared with 54.2 pounds in 2014.  However, pork consumption was expected to reach 49.2 pounds, up from 46.4 last year, and chicken consumption was expected to be 87.2 pounds, versus 83.4 last year.




The cash cattle market Tuesday remained quiet with bids at $159 per cwt on a live basis and asking prices at $163.  Last week, cattle traded at $160 to $163 live and $258 to $260 on a dressed basis.

Feedlot showlists were up this week and could thwart efforts to get prices higher, trade source said.  Besides, futures prices refuse to rise enough to narrow the gap between cash and futures.

Spot beef prices also aren’t helping the cause of cattle owners.  The USDA’s choice cutout Tuesday was up $1.78 per cwt at $247.04, but select was down $0.27 at $244.79.

The choice/select spread widened to $2.25, and a moderate 104 loads were sold into the spot market Tuesday.

The CME Feeder Cattle Index for the seven days ended Monday was down $0.78 per cwt to $213.02 from $213.80 the day before.  This compares with the Mar settlement of $211.57, down $0.85.