The USDA’s outlook for 2025 beef production was 25.120 billion pounds, down 6% from 2024, the Department said in its monthly Livestock, Dairy, and Poultry Outlook: May 2024, Thursday.
Next year will mark the third straight year of lower production following the record large volume in 2022 and will be the lowest since 2015, when the sector began to rebuild following the 2009-13 drought, the USDA said.
Cattle supplies were expected to remain tight next year, the USDA said. The ratio of heifers and cows in the slaughter mix remained above a year ago and the five-year average, and the number of heifers on feed April 1 was nearly equal to last year.
The relatively strong pace of beef cow and heifer slaughter, likely will yield a smaller year-over-year calf crop in 2025, tightening future cattle supplies.
Total beef disappearance in 2025, measured on a per capita retail weight basis, was expected to decline 5% from last year to 55.6 pounds, the USDA said. As production declines next year on the largest decline in cattle slaughter since 2013–14, it will be offset partially by record beef imports, and eight-year-low exports.
HEAVIER WEIGHTS RAISE 2024 BEEF ESTIMATE
The latest Cattle on Feed report showed the April 1 feedlot inventory at 11.821 million head, more than 1% above the 11.647 million head in the same month last year, the USDA said. Placements and marketings were down more than surveyed industry analysts expected.
Feedlot net placements in March were 13% less year over year at 1.689 million head, the Outlook report said. Despite two extra slaughter days in the month than last year, marketings in March were 1.706 million head, down about 1% year over year.
As a result, on April 1 the number of cattle on feed more than 150 days rose 21% from year-earlier levels, the report said. As a percent of total cattle on feed, this grouping is the largest since 2007.
As wholesale beef prices continue to be more sluggish than expected at this time of year, packers are likely less willing to offer higher prices for fed cattle, and feedlots appear to be willing to add pounds while awaiting higher bids, the USDA said.
Typically, there is a decline in carcass weights from the seasonal peak in November to about the end of May, the USDA said. However, given the pace of marketings, carcass weights have moved counter-seasonally higher from the first to the second quarter, and after declining slightly from their recent peaks are expected to remain flat into the third quarter before trending seasonally higher in the fourth quarter.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $184.00 per cwt to $189.528, compared with last week’s range of $184.00 to $188.84 per cwt. FOB dressed steers, and heifers went for $289.94 per cwt to $295.35, compared with $286.69 to $295.41.
The USDA choice cutout Thursday was up $3.38 per cwt at $310.15 while select was up $2.20 at $296.51. The choice/select spread widened to $13.64 from $12.46 with 88 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $351.74 per cwt, and 50% beef was $83.38.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.36 to $1.46 a bushel over the Jul corn contract, which settled at $4.57 a bushel, down $0.05 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $242.33 per cwt, up $0.54. This compares with Thursday’s May contract settlement of $244.85, up $1.70.