The US Department of Agriculture (USDA) released their latest Cattle Inventory report last week that showed beef cows in the US is the lowest level since the report began in 1972 at 28.2 million head. Overall, the USDA counted 87.2 million of cattle in the US at the beginning of the year, which accounts for a two percent reduction year-over-year.
Now the question remains; what will this mean for cattle markets. Without a doubt, the report held a bullish tone to many analysts. For ShayLe Stewart, DTN Livestock Analyst, there are several contributing factors.
“The two largest contributors to whether the U.S. cowherd will be in growth mode or will be liquidating are: green grass and profitability,” said Stewart. She added, “although most Northern cow-calf producers saw a wetter year in 2023, drought still plagued producers in the South. And even with all-time-high feeder cattle prices in 2023, higher prices don’t directly correlate to greater profitability in this day and age, as input costs have also risen dramatically in the last five years.”
Some of those headwinds could come from high input costs, elevated interest rates, or the lack of grass following the announcement of La Nina weather patterns likely to return after just one year of El Nino weather.
Another line item from the USDA’s January Cattle Inventory report that caught producers’ attention was that calves under 500 pounds as of Jan. 1, 2024 only totaled 13.28 million head — which is the smallest calf crop since 1941. Stewart says this may lead to higher cattle imports.
“We expect imports in 2024 to be like what we saw in 2023 — but even with greater feeder cattle imports, feeder cattle prices in 2024 will remain strong, and could even be stronger than the prices seen in 2023,” said Stewart.
As the market continues to gain footing in this new year, be aware that changes in beef prices, strenuous weather conditions or surprises in big-hitting reports can really change and alter the outlook for the remainder of the year.
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DTN/Northern Ag Network – 2024
