Herd Size

Brazil Surpassing U.S. As Top Beef Producer, Easing Global Supply Squeeze

Thu, 08 Jan 2026 16:01:53 GMT

Brazil surpassed the U.S. as the world’s top beef producer last year, according to market estimates, after the South American country beat output forecasts by hundreds of thousands of tons, easing a global supply squeeze and helping limit a surge in meat prices.

Brazil was already the biggest beef exporter, shipping meat worth almost $17 billion in 2025, according to government trade data released on Tuesday. Beef production numbers are not due until February, but analysts have recently raised their estimates. Farmers have been sending more animals to slaughter, cashing in on high export demand from countries including China and the U.S., where low supply has pushed beef prices to record levels.

Elevated slaughter typically leads to a period of low output as producers hold back animals to breed and rebuild herds. But productivity gains in Brazil may limit or even prevent a downturn, people in the industry say. They noted that farms have been inseminating cattle quicker, fattening them faster and slaughtering them younger.

“Ten years ago, the average age of cattle slaughtered in Brazil was five years,” said Vinicius Barbosa, a commercial manager responsible for tens of thousands of cattle at the CMA feedlot in Barretos, about 260 miles (420 km) north of Sao Paulo. “Now it is 36 months and going rapidly to 24,” he said.

Mauricio Nogueira, head of livestock consultancy Athenagro, said Brazilian beef production far surpassed his forecast in 2025. Output grew 4% for the year, where he had predicted a 2.7% drop. The increase of around 800,000 tons was about equal to total annual exports of Argentina, the world’s No. 5 beef shipper.

Rabobank, which had expected Brazil’s beef production to decline in 2025, now sees 0.5% growth to 12.5 million tons carcass weight equivalent. The U.S. Department of Agriculture in December raised its estimate for Brazilian beef output by 450,000 tons to 12.35 million tons.

If the official numbers confirm market estimates, 2025 will be the first year that Brazil’s output will have surpassed U.S. production, which fell 3.9% to 11.8 million tons in 2025, according to USDA estimates, following years of drought.

Feedlots, Rising Carcass Weight Drive Output

U.S. beef production will fall a further 0.9% to 11.7 million tons in 2026, the USDA said. In Brazil, the USDA and Rabobank project a decline in output, but Nogueira said rising productivity could actually boost Brazil’s production by around 300,000 tons.

Almost 28% of cattle slaughtered in Brazil will be fattened in feedlots by 2027, up from 22% in 2025, according to consultants Scot Consultoria.

“Feedlots do in 100 days for cattle what pasture does in between 18 and 24 months,” said Barbosa, adding that CMA’s Barretos feedlot would process 80,000 cattle in 2026, up from 65,000 last year.

A drone image shows cattle entering a feedlot at CMA Farm in Barretos, Sao Paulo, Brazil.

(Joel Silva/Reuters)

Brazil’s booming corn ethanol industry is generating a byproduct known as dried distillers grains that has higher protein than corn and helps cattle fatten faster, analysts said.

Cows are becoming pregnant more often as farmers adopt more efficient insemination techniques, allowing producers to slaughter more animals without reducing herd size.

Scot Consultoria expects Brazil’s pregnancy rate - the proportion of females that become pregnant during a breeding season - to rise to 54% in 2027 from an expected 50% in 2026.

Better genetics are also improving cattle growth and boosting meat quality, analysts say. And Brazil still has not matched the 90% proportion of cattle passing through feedlots as in the U.S., or Australia’s 40%.

If Brazil’s pregnancy rate rose to 66%, equivalent to neighbouring Argentina, the number of calves birthed each year would rise from an estimated 32 million to 40 million, according to consultants Datagro. The pregnancy rate in Canada is 96%, they said.

Government data show Brazil has 238 million cattle, well over double the 94 million in the U.S. Higher productivity would allow output to expand without increasing cattle numbers or the area of pasture land. That could ease one economic driver of deforestation of the Amazon rainforest.

Brazil’s cattle herd is expected to grow just 4% between 2024 and 2034 while beef production increases 24%, according to Brazilian beef exporter group ABIEC. U.S. beef production will rise 3.5% and cattle numbers will grow 5% over that period, by USDA estimates.

Brazil Key As Top Producers Scale Down

Global beef prices will hinge on whether Brazil can avoid a production downturn this year.

The USDA expects output in the world’s six biggest producers to fall in 2026 by a combined 2.4% - the biggest annual drop in decades - after rising 0.4% in 2025. These producers are Brazil, the U.S., China, the European Union, Argentina and Australia. The list excludes India, which the USDA names as one of the six top beef producers even though that country produces buffalo meat rather than beef.

The USDA expects Brazilian production to fall 5.3% to 11.7 million tons carcass weight equivalent this year. If Nogueira’s estimates are confirmed and output rises instead to around 12.6 million tons, the decline in the top six producers would be just 0.2%.

“There has never been so much international demand for Brazilian beef,” said Guilherme Jank, a Datagro analyst, adding that local beef packers have also ramped up capacity.

“We are witnessing firsthand a significant shift in how the beef cattle supply system works in Brazil, in terms of quality, scale, efficiency, and productivity,” he said.

(Reporting by Ana Mano in Barretos and Peter Hobson in Canberra; Additional reporting by Ella Cao in Beijing and Tom Polansek in Chicago; Editing by Brad Haynes and David Gregorio)

Shrinking Slaughter Capacity: What's Next in 2026?

Wed, 24 Dec 2025 17:33:42 GMT

The long-feared rightsizing of shackle spaces to more closely match the number of cattle has begun.

“The market’s reaction to the November announcement was a good reminder that market volatility still exists even when the supply and demand fundamentals continue to be positive forces into the start of 2026,” says Dave Weaber, Terrain senior animal protein analyst, in his Q1 2026 Outlook .

In late November, Tyson Foods announced its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift.

“Terrain estimates the changes will eventually reduce U.S. slaughter capacity by about 6.6%,” Weaber explains. “However, slaughter plant capacity utilization is still nearly 6% behind historical norms, as the number of cattle is still well short of filling available slaughter capacity.”

Weaber predicts this positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect utilization to decline by about 2% during 2026 when two new plants in Nebraska and Missouri complete their startups,” he adds.

A proposed plant in the Panhandle of Texas that would handle 6,000 head per day has the potential to lower utilization rates back to early-2025 levels if completed.

“Even without additional future slaughter capacity, utilization rates will remain low; fed cattle numbers are expected to decline during the next two to three years because of cow-calf producers’ beef cow herd expansion efforts,” Weaber summarizes.

The reduction in current fed slaughter capacity will help the remaining plants run more volume, improving efficiency by spreading fixed and semi-variable costs across more head and pounds of beef. This positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect that in the near and intermediate term, this effect will at least partially offset the shift in market leverage, which currently favors the packer,” Weaber says.

Markets and Beef Prices Remain Resilient

Beyond the near-term impacts to futures traders’ sentiment, the market impacts of the announced closures are fading.

“Calf, feeder cattle and fed cattle cash markets are already recovering and have posted significant rallies,” Weaber says. “Fed cattle supplies for the first half of 2026 are not going to change. The number of cattle placed into feed yards is the number placed and will be the number that gets slaughtered. The location the cattle get processed into beef may change, but overall beef production is mostly set.”

(USDA NASS, Terrain)

He adds: “ Consumer beef demand and spending remain strong and supportive of cattle prices. Presidential and executive branch rhetoric about lowering beef prices has had little to no impact on retail and wholesale beef prices. Tariff reductions on imported lean trimmings from South America are driving volumes, but prices for contracted loads delivering in the first quarter of 2026 are record high, up 20% from a year earlier.”

“I expect the choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

— Dave Weaber

Q1 2026 Price Outlook

“I expect available fed cattle supplies during the first quarter of 2026 to be 6% to 7% smaller than the year prior,” Weaber says. “Even with a 2% shift in leverage (fed cattle price to comprehensive cutout) to the packers’ favor, I expect the Choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

By early December, light feeder cattle and calf auction prices have recovered much of the losses incurred since late October and appear poised to start 2026 at record levels.

“Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices,” Weaber stresses.

Further rallies in deferred live cattle futures will drive the balance of the recovery in prices for heavy feeder cattle that make up the CME feeder cattle price index. He explains demand for light cattle to be turned out on wheat pasture and California coastal range has been a key driver for the rally in light cattle.

Biggest Risk Is South of the Border

Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices.

“The Mexican government has implemented broad cattle movement and import restrictions within the country as well as greater fly control measures in partnership with the USDA,” Weaber says. “Meanwhile, U.S. and Mexican officials have begun inspections of only one border crossing into New Mexico. Additional cases of New World screwworm have been found in Mexico, which I expect to further delay the reopening.”

Active risk management to preserve operation equity should remain a priority.

“If the border were to reopen, cash feeder cattle and calf prices and feeder cattle and live cattle futures would be the first to move down,” Weaber explains. “The magnitude of the impact will depend on the rate-limiting and cost impacts of the protocols that are implemented and the number of backlogged cattle south of the border.”

One Lesson From Plant Closures

“If we’ve learned anything from the market reactions to the plant announcements, it’s that price volatility should be a focus for producers in all segments of the cattle industry,” Weaber says. “Active risk management to preserve operation equity should remain a priority.”

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Navigate Market Volatility with Risk Management Strategies

Beef’s Future: Consumer Demand, Risk Management and the Path to Continued Profitability

$4 Feeder Cattle: Dream or Reality?

Mon, 27 Oct 2025 19:37:12 GMT

As October draws to a close, U.S. officials are reportedly going to meet with Mexican counterparts this week to talk about reopening the border . The possibility of trade resuming, coupled with President Donald Trump’s comments on lowering beef prices and Agriculture Secretary Brooke Rollins’ announcement to “fortify the beef industry,” sent the cattle market spiraling in recent days.

Despite the downturn, the fundamentals haven’t changed: reduced supply and strong consumer demand are fueling record-high market prices.

“The reduction in available supply and robust beef demand to-date has clearly provided price support,” says Glynn Tonsor, Kansas State University professor of agricultural economics. “Tied to that is the biggest risk in my opinion — beef demand. Anything that erodes beef demand strength, most likely macroeconomic and consumer income in nature in my opinion, will put downward pressure on cattle of all weight classes.”

Tonsor says he never gave $4 much thought until the past couple of years.

“If we adjust for inflation or consider production costs, $4 feeders aren’t what they used to be. It takes $4-plus feeders to generate the net returns we used to get from lower prices,” he explains. “These are profitable prices for ranchers — and it’s about time.”

Tonsor predicts feeder cattle prices to continue under current conditions but does not predict increased profitability due to increasing operating costs.

“The 2025 bull market has been exceptional by every measure,” summarizes Lance Zimmerman, RaboResearch Food & Agribusiness senior beef industry analyst. “500-lb. steer prices are now more than 50% higher than last year, and 800-lb. steer prices are nearly there at just under a 50% price increase year-over-year.”

As a frame of reference, the CME feeder cattle cash index, which captures the average 700 lb. to 899 lb. steer price, averaged $367.08/cwt. the week of Oct. 20. This fall, livestock auction markets across the country have reported lightweight feeder cattle surpassing the $4 mark.

“I think it is entirely possible for feeder cattle to get to $4,” says Don Close, Terrain Ag senior animal protein analyst. “However, I think it will be late summer and fall 2026.”

According to Close, there are three critical components for feeder prices today:
1. Mexican border reopening
2. What disruptions could come to the beef-on-dairy supply
3. Feed prices

“Of that list, Mexico border closure is the real wild card,” he explains. “I don’t see a measurable disruption to beef-on-dairy or feed costs in the near term.”

When Will We Hit the High?

Oklahoma State University’s Derrell Peel, Extension livestock marketing specialist, explains the highest average prices are likely a year or more after heifer retention begins.

“We don’t have any confirmation heifer retention has started to any significant level in 2025,” Peel says. “We have already pushed off any signs of herd rebuilding by one to two years longer than I earlier expected, and we are looking at extending it another year if heifer retention does not start in the fourth quarter. Because the response has been much slower this time than previous cattle cycles, prices have certainly gone higher than I would have expected a year or two ago — though I did expect record-high prices.”

Peel predicts the next expansion phase will be different than the 2014-19 expansion cycle.

“The 2014-19 herd expansion was historically rapid, this current one is historically slow,” he says. “It is a combination of a lengthy list of factors that combine to make this a slow response, and it looks like it will remain a slow, lengthy process.”

Close shares his thoughts on the complexities of the current cycle:

Drought and economic stress. “As an industry, we didn’t fully recognize the severity of the drought as well as the degree of economic stress to the sector,” he says. “The fallout of the 2014 to 2015 price drop is still fresh on producers’ minds, so they have been using the prices of the past three years to get balance sheets in order, pay down debt and now are starting to make capital improvements.”
Producer age. “The average age of cow owners is a factor, so many have used current prices to liquidate and retire,” he says.
Female costs. “Replacement female prices that range from $3,000 to $5,000 restricts and scares some away,” he says. “That is only compounded with the addition of current interest rates.”
Cow size. The escalation in average cow size limits how many cows can run on a given unit of pasture.“
Land. “You hear producers make comments on the difficulty to find additional pasture in order to expand,” he says.

“This cycle has been driven or limited from a combination of all the above,” he says. “Our view is we need to rebuild by 2 to 2.5 million head. Keep in mind, given the escalation in carcass weights, we don’t need as many cattle to produce an equal quantity of beef.”

Close adds his thoughts regarding the impact of last week.

“Given all of the turmoil over the past week it is going to be even more difficult to trigger expansion,” he says. “There is no work around for destroyed producer confidence. I think current market action will further delay expansion.”

Ag Economists’ Monthly Monitor Predicts Bull Market to Continue

Cattle prices are expected to stay high well into 2026, according to the latest Ag Economists’ Monthly Monitor from Farm Journal. Nearly half of agricultural economists surveyed (47%) believe the current bull market in cattle could continue another 19 to 24 months, while another 27% say it could last 13 to 18 months. Only 7% expect prices to peak within the next six months.

“This run isn’t over,” one economist wrote. “At current prices we will see no or little herd expansion.” Another adds the fundamental supply side remains tight: “Clear signals that domestic beef production is increasing may be the key catalyst for a market top.”

“This is a nature of biology to some extent, it takes a while once you even start to retain a heifer for that heifer to produce a calf that then becomes a feeder calf that then becomes a fed calf that then becomes beef at the grocery store itself,” says Ben Brown, an Extension economist with the University of Missouri. “I don’t think we’ve seen necessarily the top of this cattle market yet.”

Even if cattle prices are close to seeing a top, that doesn’t mean prices will crash, he adds.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

What Could End the Rally?

When asked what might trigger a peak in cattle prices, responses to the Ag Economists’ Monthly Monitor were mixed — but demand destruction and herd rebuilding topped the list. Economists were asked to choose between five options, including:

The reopening of the U.S./Mexico border to Mexican feeder cattle imports
U.S. economic concerns with fallout from trade tensions with China
Removal of tariffs that would resume high levels of beef imports from Brazil
Demand destruction in the U.S. market

One respondent notes, “All of the above are relevant, but clear signals that domestic beef production is increasing may be more important.” Others pointed to a slowing U.S. economy or producers “beginning to hold back replacement heifers” as potential turning points.

“I have no idea what creates the top, but at current prices, we will see no/little herd expansion,” adds yet another economist.

“Beef Prices Can Stay High Longer Than Most Expect”

Economists agree the U.S. cattle market remains fundamentally strong, supported by limited supplies, robust export demand and solid retail prices. However, they caution the same forces keeping prices high — tight herds, high feed costs and inflation — could eventually cool the rally.

As one economist sums it up: “Beef prices can stay high longer than most expect — until consumers finally say ‘enough.’ That’s when we’ll see the turn.”

USDA Has No Plans for Financial Incentives to Rebuild Cattle Herd

Fri, 26 Sep 2025 13:44:48 GMT

Colin Woodall, CEO of the National Cattlemen’s Beef Association (NCBA), says currently USDA does not have plans for an incentive program to help rebuild the beef cow herd.

Woodall joined Farm Journal’s Chip Flory on “AgriTalk” Sept. 25. He was quick to dispel the idea of a herd rebuilding or replacement heifer incentive program.

“There is no financial incentive program,” he says. “Regardless of what you’ve heard, or who you have heard it from, that program does not exist.”

Secretary of Agriculture Brooke Rollins mentioned a potential incentive program in a news release on Sept. 21 .

“In addition, USDA will soon release a significant plan to help rebuild the American cattle supply, incentivizing our great ranchers, and driving a full-scale revitalization of the American beef industry,” the release said.

Woodall explains how quickly the statement in the press release spread, noting it “lit like a grass fire” throughout the cattle industry and markets.

He points out that while Rollins’ team has been in contact with NCBA about potential support for cattle producers, a direct financial incentive is not part of their current plans.

“You can never rule out what the federal government might do,” Woodall says, but also emphasizes that based on current conversations, no immediate program is forthcoming.

Woodall suggests alternatives might include “rolling back some regulations” and making it “easier on cattle producers from a regulatory burden standpoint.”

A concern for Woodall is the potential market impact of an incentive. He says the NCBA team has specifically visited with Rollins’ team about how comments like an incentive program to rebuild the cow herd can have a significant market impact.

He was clear NCBA is not advocating for a financial incentive program, saying: “This is not something that NCBA is pushing for. It’s not something that we are endorsing.”

Thursday, Rollins was in Kansas City at the Ag Outlook Forum hosted by the Agricultural Business Council of Kansas City. During her comments she said because the cattle industry has seen a big drop in producers over the last decade USDA is committed to rebuilding it.

“Low inventory and high demand is not sustainable if we want to feed ourselves,” Rollins says.

She did announce there is no current plan to offer payments to beef producers.

“No plan for direct payments is even under consideration,” she explains. “The government getting involved in markets can easily mess things up.”

The plan will focus more on risk-mitigation tools and hope to attract the new generation of farmers to enter the cattle industry. She says more details will come in mid-October.

Your Next Read: The Battle at the Border

Are Cattle Producers Rebuilding Their Herds Now?

Wed, 25 Sep 2024 16:08:56 GMT

Editor’s Note: This article is part of the Drovers 2024 State of the Beef Industry report, which includes an exclusive survey of cattle producers and their thoughts on numerous topics of importance to the future of their operations. To download the full report, click here .

America’s beef cattle inventory continues to tighten, pushing market prices to record levels. Under normal conditions, that would lead to anticipation about building herds again. If this were a typical cattle cycle, the elements for expansion — ample forage and record-high cattle prices — would be in place. However, the current cattle cycle is not typical other than the recent liquidation when drought forced significant culling and resulted in the smallest U.S. cattle herd inventory in 70 years.

The pace of expansion or herd rebuilding in the current cattle cycle will be much slower than past cycles, and the extent of herd building will also be reduced. That has been the case for previous beef inventory expansions since 1975’s peak of 132 million head as subsequent cycles have all peaked below the previous cyclical peak. For instance, the 1982 peak was 115 million head, 1996 at 104 million, 2007 at 97 million and 2019 at 95 million. What has changed?

Production-wise, efficiency has increased and the industry produces significantly more beef with fewer cattle, which impacts prices. When expansion begins, smaller increases in inventory pull prices lower. But there are other crucial factors that influence individual ranchers’ plans to continue in the cattle business.

Volatility Will Increase

The age of farmers and ranchers is critical as decisions are made going forward. Closely tied to age is the financial stress of the market over the previous four years. This plays a greater role for part-time cattle producers. The drought coupled with low prices and accelerating costs of production are key to the decision. I often hear ranchers comment: “Why would I or my spouse continue working in town to support cows that are draining our bank account?”

For many of those part-time cattle producers, the cows went to the sale yard. Will they be replaced? Only time will tell, but many will not return to the business. The other major consideration of this cycle is the price of replacement cows or heifers.

Ranchers are rightfully wary of a market that could become increasingly volatile. It’s a major risk to invest in cows or breed heifers with high maintenance costs that won’t deliver a marketable product for two-plus years.

The decision to own cattle or expand an existing herd will be influenced by high interest rates and rising production costs, further slowing the speed of any herd rebuilding.

Rebuilding The Cowherd Remains On Hold

One of the biggest factors on everyone’s mind revolves around if and when cow-calf producers might begin rebuilding the cowherd. Much of that decision to date has been contingent on the weather. However, despite improving forage availability and conditions (and higher prices), producers remain tepid about running more cows.

Drovers State of the Beef Industry 2024 Report

(Farm Journal)

The 2024 Drovers State of the Beef Industry survey asked, “What are your plans to restock your cowherd (as a result of the drought)?”

In both 2023 and 2024, 21% of respondents indicated “next year.” The process remains on hold. However, some of that reluctance might prove to be permanent. One key difference in this year’s survey has more producers indicating they have “no plans to restock” (23% versus 14% in 2024 and 2023, respectively).

There’s not much appetite to aggressively rebuild the cowherd. Producers are cautious when it comes to running more cows.

Drovers State of the Beef Industry 2024 Report

(Farm Journal)

Your Next Read: A Glimpse Into the Cattle Inventory Black Hole

Ag Economist Talks Trends To Watch In The Livestock Industry

Wed, 24 Jul 2024 20:48:09 GMT

After a tough couple of years in the livestock industry, Scott Brown, an ag economics professor at the University of Missouri, says there may be a light at the end of the tunnel. He recently joined the Top Producer podcast to share what he believes is on the horizon for beef, dairy and pork producers.

Rebuilding In Beef
Brown shares the current state of the beef industry began forming in 2020. And after three years of drought in cattle country, as well as significant liquidation, there’s a supply shortage.

“I think it’s taken us longer than maybe we typically would have thought to get some rebuilding to happen,” Brown says. “You add on top of that costs have just continued to go higher, so the prices we need for cattle to generate the interest to grow herds are very different today than just a few years ago. A lot of that’s at play.”

He expects to hit 2026 before there is significant growth in the country’s beef cattle herd.

“At some point, there will be enough profitability to get more beef cows back in the herd,” Brown says. “I think the operations will also continue to get bigger on the cow/calf side.”

Improvement In Pork
Coming off of a year Brown likens to 1998 for pork producers, he says the financial side is showing signs of improvement.

“By April, we were starting to see hogs that might have been in the black again for the first time in several months,” Brown says. “There’s still a lot of them that have probably a reasonably deep financial hole to climb back out of given how tough 2023 was, but it’s good to see some positive news on the pork side.”

He adds productivity has been phenomenal and anticipates international demand to play a large role in the future.

“Even though we’ve been losing sow inventories in the country, productivity has more than offset some of that and suppliers continue to run fairly high,” Brown says. “The pork industry generally has been really good about getting international demand to grow in some new places. Central America, Mexico and now some smaller Central American countries are now taking some pork from us. That’s a great longer term move for the pork industry.”

Expanding Demand In Dairy
Like the pork industry, Brown says dairy experienced a tough 2023 due to low prices.

“Dairy markets are the most demand inelastic markets we have in agriculture. But when supplies out strip that demand just a little bit, we can get some fairly low prices. I think that happened in 2023,” he says. “Cheese has been one of the most important demand-side factors. How do we continue to expand that side?”

Looking ahead, Brown says prices have improved in dairy and at the same time, lower prices for corn and soybeans are helping producers as well.

Hear more on the Top Producer podcast .

USDA is Discontinuing A Major Cattle Report, And it Could Now Spur More Volatility For Cattle Prices

Fri, 12 Apr 2024 19:44:58 GMT

USDA announced this week it’s nixing a major cattle inventory report . The July Cattle Inventory report, which is only one of two inventory reports released each year, will be no more.

The National Agricultural Statistics Service (NASS) announced it’s also canceling all county estimates for crops and livestock starting this year. In the announcement, NASS blamed budget cuts from the most recent appropriations bills.

It now intends to only release one cattle inventory report annually in January.

“It’s going to be something to the livestock market and the grain markets are going to have to get used to,” says Chip Nellinger, co-owner of Blue Reef Agri-Marketing. “It obviously has implications as far as what the herd size and the different classes and weights across our cattle herd are. So that’s going to be a big unknown in the middle of the year.”

Nellinger says the other side is how the report could also impact the grain markets.

“What’s that mean to feed demand? How many head of cattle are on feed,” says Nellinger.

Related News: NASS Discontinues County Estimates For Crops And Livestock and July Cattle Report

At a time when tight cattle supplies generated record-high cattle prices already this year, the timing of no July Cattle Inventory report is also murky. Arlan Suderman of StoneX Group says it will have an impact on the cattle markets.

“It adds to the volatility, it definitely does,” says Suderman. “The frustration in the industry is when they look at some of the things that USDA is spending money on, that don’t seem to be part of the original mission of the agency, and then short change us on issues that really have an economic impact on the development and progress of the economy of this industry. That’s where the frustration is.”

Related News: U.S. Cattle Inventory Reaches 73 Year Low

NASS’ decision to cancel the report is garnering frustration from farm group, including the National Cattlemen’s Beef Association (NCBA). NCBA also thinks this could mean more volatility for the market and make it more difficult for producers to see into the future when it comes to supplies.

USDA tried to cut the July cattle inventory report in 20-16 and ended up reinstating it. NCBA calling on NASS to reverse its decision again.

You Ain't Seen Nothing Yet: Why Economists Say Cattle Prices Will Soar Even Higher This Year

Mon, 05 Feb 2024 17:03:12 GMT

There’s no doubt the U.S. cattle inventory continues to shrink . The latest numbers from USDA out this week showed the U.S. cattle inventory dropped 2% year-over-year with 87.2 million head of cattle and calves on U.S. farms as of Jan. 1, 2024.

Other key figures from the report showed:

Of the 87.2 million head inventory, all cows and heifers that have calved totaled 37.6 million.
There are 28.2 million beef cows in the United States as of Jan. 1, 2024, down 2% from last year.
The number of milk cows in the United States decreased slightly to 9.36 million.
U.S. calf crop was estimated at 33.6 million head, down 2% from 2022.

“Not really a lot in the way of surprises in this report, it was pretty well anticipated,” says Derrell Peel, Extension Specialist for Livestock Marketing with Oklahoma State University. “I think the take home message here is pretty powerful in that this industry continues to get smaller. We got smaller through 2023. So we’re coming into 2024 with smaller cattle inventories pretty much across the board.”

Peel points out with the U.S. beef cow herd the smallest since 1961 and the all cattle inventory the lowest since 1951, it’s setting the market up for more strength in cattle prices.

“We have gotten smaller than we intended to be smaller than we need to be from a market standpoint,” says Peel. “And I think that’s going to be where we jump off to think about where we go from here.”

Nevil Speer of Turkey Track Consulting says not only did the latest report shows signs of further contraction, there currently aren’t any signals showing the rebuilding of the U.S. cattle herd has started to take place.

“40% of the on feed population is heifers last quarter. So, there’s no indication that we’re ready to dig back in and start rebuilding,” says Speer.

So, could the U.S. cattle market see higher highs? Dave Delaney of Ever.Ag says it’s a bit of a loaded question, but volatility will continue to take place.

“Short-term, I think as we look at the fat cattle market, we’re on a plane of steady to maybe a softer undertone for a short period of time, but I do believe we are going to go higher in the fat cattle market, as well as the feeder cattle market.”

“We’re nowhere near done with this thing,” says Peel “We had a tremendous runup in prices in 2023. And you can look at the setup last year, and I know some producers are thinking, ‘Okay, we’ve got our run up that we’re close to the top.’ And we’re comparing a lot to 2014 and 2015, which were the last highs, but those high prices in 2014 and 15 happened a year to a year and a half into herd expansion.”

Peel says the highs of the market will be in once the industry starts to retain more heifers and the rebuilding process has taken place.

“That’s what puts the highs in the cattle market. So, we haven’t started that process yet. That’s all ahead of us,” says Peel.

The El Niño Effect: Is El Niño to Blame for the Historic Heat and Drought that Gripped the U.S. in 2023?

Tue, 02 Jan 2024 22:10:01 GMT

2023 was a year full of weather impacts on crops and livestock. From the intense heat in the South to the drought that parked itself across the South and Midwest, USDA meteorologist Brad Rippey says those are the two weather events that stole headlines this past year.

“When we look back at 2023, I’m actually going to break heat and drought into two separate categories,” says Rippey. “Really, when you look at the extreme heat this past year, it was focused across the deep South from Arizona to Florida, and pretty much everywhere in between. And that was certainly a huge weather story that affected parts of the cotton belt.”

From wiping out a large part of the cotton crop in west Texas to hitting sugar cane production in Louisiana, Rippey says nearly the entire deep South saw impacts of the year’s extreme heat.

“Of course, that came with drought in many cases. But when you look at these overall temperatures, the hottest summer on record and a lot of hottest months on record, that was a big story in the deep South,” says Rippey.

While other parts of the U.S. still had drought, in some areas it didn’t pack as big of a punch because it came without the heat. That was the case in much of the Corn Belt. The drought hit last year without the extended intense heat, which had a big impact on crops.

“We were very fortunate, especially in the Corn Belt, that we did not see the combination of extreme heat and drought at the same time. And that actually led to some of those better outcomes than expected for U.S. corn,” explains Rippey.

With USDA currently projecting the 2023 U.S. corn crop to be the largest on record, Rippey says the mild temperatures are what helped save the crops.

“You do see that things actually turned out better in states like Iowa. When you look at the rainfall numbers, they were abysmal, almost as dry as 2012. But then the heat just wasn’t there. And today’s varieties are little bit more tolerant of drought and heat. And the outcome was a little better than we expected,” says Rippey.

It wasn’t all good news. While crop yields turned out better than expected for some farmers, the lack of moisture continued to dwindle grazing conditions and hay stocks in 2023. Those created additional hurdles in rebuilding the shrinking U.S. cattle herd.

So, what was the culprit that caused the intense heat that suffocated the South during the summer months? Rippey says while it’s still being studied, he thinks it’s tied to one major weather event in 2023, in particular.

“I will go out on a limb and say that that may have been an early sneak attack from El Niño ,” says Rippey. “The reason I say that is that because we did have an early onset El Niño. It was pretty much in place by late spring, early summer. It’s pretty consistent with El Niño to have a big ridge of high pressure that comes out of Central America. And at times, we’ve seen it before, that does sometimes extend all the way into the southern tier of the United States.”

He says El Niño can also be tied to the shipping crisis that wreaked havoc on exports in 2023, causing massive shipping delays, as well as forcing shippers to carry lighter loads.

“And certainly what happened in Mexico and parts of Central America, think about the Central American drought that’s causing shipping problems in the Panama Canal. A lot of that, I think, could be tied to the heat in the atmosphere related to the early onset El Niño,” says Rippey.

According to Rippey, the drought in the Midwest can be attributed to the blocking high pressure that wouldn’t budge across Canada this past spring, summer or fall.

“The U.S. Midwest happened to be on the southern end of a lot of that high pressure over Canada. So when we think about that, think about the Canadian wildfires, all the smoke coming down. And we were just on the southern edge of that in the Midwest,” Rippey explains.

He says that, along with Northeasterly winds blocking moisture from the Gulf, is what caused the drought in the Midwest.

“At the same time, high pressure was far enough north that the heat and unusual warmth were actually focused across Canada. So, it wasn’t all that hot on the southern end of the high, but it was dry. And that led to that cool drought in the western Corn Belt,” he adds.

El Niño is still in play, as Rippey says El Niño made a splash once again to close out 2023.

“Now that El Niño has kicked in, it’s a strong event, it could be one of the strongest on record,” says Rippey. “We’re seeing that influence of El Niño starting to grab a hold of the reins of U.S. weather patterns. And that’s pretty normal and certainly should continue into early 2024.”

What’s on tap for 2024? Rippey forecasts the intense El Niño will lead to what he calls “pretty profound” impacts for the rest of the winter, and even into spring.

Will Cattle Prices Smash New Records This Year, Topping 2014?

Sat, 04 Feb 2023 17:30:41 GMT

After four years of liquidation, the U.S. cattle herd continues to contract . With drought still a driving force behind lower cattle numbers, market experts think cattle price could top previous price records set back in 2014.

According to the semi-annual cattle inventory report , total beef cow inventory numbers were down 4% year-over-year, coming in at 28.9 million head. According to Drovers, the total beef cows reached the lowest point in inventory in over 50 years.

According to Don Close, chief research and analytics officer for Terrain , the inventory report revealed even tighter supplies than what the market expected.

“I think we’ve been a little bit misled because of the cattle on feed numbers still at 100%,” says Close. “But if you look at the numbers behind that, and what’s available for replacement cattle, as we go through 2023, I think that supply is going to contract at a substantially faster rate than what we’ve been expecting.”

The Gas Tank is Empty

Close expected the inventory report this week to show some heifer retention taking places in areas like the Dakotas, Montana and the Southeast. The report revealed the opposite, which means the stronger cattle prices could be a trend longer-term.

“The report to me, it just shows the gas tank empty, and all classes of cattle,” says Close. “And so I’d say the biggest surprise for me going into that record is there’s been absolutely zero heifer retention to this time. And I agree with Derrell, we don’t have the green light to move forward yet.

It’ll Take Longer to Rebuild This Time

With heifer retention low, it paints the picture of a smaller calf crop. Peel says that’s another reason he thinks the rebuilding of the U.S. cattle herd will take longer than a decade ago .

“It’s going to take longer to rebuild this time, because I do think the gas tank is empty,” says Close. “It’s going to take longer to develop heifers for breeding. And when you look at the biologics of the way the cattle industry works, it’s going to take longer than it did the last time, certainly in terms of our ability to rebuild the herd and get beef production back up once it comes down here, going forward.”

Read More: Will Volatility and Uncertainty Delay the Next Cattle Cycle?

The U.S. saw extreme drought impact the cattle herd, leading to tighter supplies in the foreseeable future, with rebuilding likely to have a longer tail than the last time and the price forecasts remaining bullish. But now it’s a question of if prices can top the highs set back in 2014, and Close thinks cattle prices will hit new highs.

“I don’t think there’s any question about it,” says Close. “If we look at the low 170 level on fed cattle that we saw at the peak of the 2014/2015 market, I think before this one’s done, we will go through those old historical highs with gusto. And to support that, I still think we’re working with a very solid demand base under the market, which is only going to exacerbate this whole situation.”

Higher Highs for Prices?

Peel thinks cattle prices will continue to trend higher, but when could prices peak? Peel says that depends on a few different factors, but he’s watching either the end of this year or early next year before prices find the top.

“The real spike in prices will come when we do start that rebuilding process and we do start retaining heifers,” says Peel. “That’s what squeezes slaughter in the short run, and we’re not sure when that’s going to happen. It still depends on the drought, but it could certainly start this year. It’s either late 2023 or into 2024 when we get that real spike in prices, and Don’s absolutely right with there’s no doubt we will see record prices for both feeder cattle and live cattle.”

AgDay TV Markets Now: Kevin Good of CattleFAX Has a Bullish Cattle Price Outlook for 2023

Will Volatility and Uncertainty Delay the Next Cattle Cycle?

Cattle Numbers Historically Tight: When Does the Market Realize It?

Wed, 16 Nov 2022 16:02:50 GMT

Cattle producers liquidated their herds this summer with drought across much of cattle country. They also faced poor pasture and winter wheat conditions. So, what does that mean for the fall cattle run and the market outlook?

Live cattle futures hit new contract highs on October 25 but have disappointed the bulls as they’ve been consolidating ever since. Meanwhile feeder cattle futures hit contract highs in mid-August and have never retested the highs even with historically tight supplies. So, when is the marketing hole finally going to hit? Market experts tell me while its past due, there’s clues it will hit in 2023.

With deep culling, daily cattle slaughter has continued to run in the 127,000 to 129,000 range and for the year slaughter is up about 1.5% over 2021. Some of its the increased cow slaughter. Mark Schultz, Northstar Commodity says, “Your beef cow slaughter is still running high 83,000 a little over 83,500 last week. You’re on pace to have an all-time record of the most beef cows slaughtered in this country for the calendar year of 2022.”

Cow slaughter should start to taper off soon and with large feeder cattle runs through the summer and fall those numbers have started to tighten as reflected in the price. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist says, “Starting in mid no mid-October. We did see it start to see some year over year decreases in the feeder cattle runs. And we’ve also seen prices improve in the last half of October and going into November. We’ve seen a significant recovery and the prices I’ve certainly the fall low, I think is already in.” He says the biggest feeder numbers come late November and December, but he thinks more moved early in the south. Peel says, “I think there’s a good chance that we’ll be a little bit smaller than usual as we finish out this fall calf run.”

So, when will the tighter numbers start hitting the live cattle market? Brad Kooima Kooima Kooima Varilek says one key will be when heifers start being retained instead of placed in feedlots, but likely first quarter 2023. He says, “So I remain supply side optimistic for the next year or so maybe by April we could get this market on top of 160 if it falls right in my opinion.” And he’s more bullish longer term. “I think someplace in the next 12 to 16 months we’re going to a place of all-time highs, which is 174.”

That’s barring a black swan or economic event to hurt demand. Tighter numbers are also anticipated in Friday’s Cattle on Feed Report with on feed estimates down 2% and placements down 4%. At the same time, even with higher feed costs the latest Sterling Beef Packer Tracker has average profits of $222 per head for cattle feeders, the highest since late April.