In the first six months of 2024, the volume of federally inspected heifer and cow slaughter are down by 1% and 14%, respectively. Further, as Figure 1 shows, the percentage of heifers and cows in the slaughter mix in terms of the weekly average for January-June over the past 20 years, 2024 has declined year over year. However, 2024 is the third-highest in the last 20 years and the eighth-highest since weekly slaughter data began in 1960. With the cancellation of the July USDA National Agricultural Statistics Service (NASS) Cattle report, data on producers’ intentions will not be available. However, an update on the number of steers and heifers on feed will be published in the July USDA NASS Cattle on Feed report, which should give some indication of whether large numbers of heifers were placed during a period when many breeding decisions are typically made.
Second-half 2024 production up on faster marketing pace
The outlook for 2024 beef production is raised from last month by 65 million pounds to 26.655 billion pounds but is 1% below last year’s estimate. This month’s forecast reflects updates to the second-quarter forecast based on actual slaughter data through June. Given the pace of marketings in the second quarter, marketings are expected to be slightly faster in the third quarter (Figure 2). However, this is largely offset by fewer cows in the slaughter mix, and the beef production forecast is unchanged.
For fourth-quarter 2024, the production outlook is raised from last month as more fed cattle are expected to be marketed, based on anticipated year-over-year higher second-quarter placements. Based on the latest Cattle on Feed report, published by NASS, feedlot net placements in May were 5% higher year over year at 1.984 million head. Based on sales receipts reported in the Agricultural Marketing Service (AMS) National Feeder and Stocker Cattle Summary, as well as relatively high feeder cattle prices during the month, expectations for placements in the second quarter are raised from last month.
Beef production for 2025 is projected higher than last month by 100 million pounds to 25.465 billion pounds. Compared to last month, more placements are expected in late 2024 and early 2025, contributing to a faster-expected pace of marketings in the first three quarters. However, the increase in marketings is partially offset by lower expected cow slaughter in the first half.
Cattle prices projected higher from last month
In the first half of 2024, forage conditions have generally improved from a year ago, corn prices are relatively less expensive and the prospect for higher fed cattle prices this year has supported strong feeder cattle prices. Despite a 4% decline in calves available for placement at the beginning of the year, placements have been supported to some extent by a 10% and 20% increase year over year in imports of feeder cattle from Canada and Mexico, respectively, through the first five months of the year. However, the expected supply for feeder cattle available in second-half 2024 will remain tight, supporting elevated feeder cattle prices.
In June, the weighted average price for feeder steers weighing 750-800 pounds at the Oklahoma City National Stockyards was $263.47 per hundredweight (cwt). This was a $10 increase from May and nearly $33 higher than June 2023. In the first two weeks of July, the weighted average price was $265.69 per cwt. Accounting for recent price data and tight cattle supplies, the third-quarter price forecast for feeder steers is raised $6 to $269 per cwt, and the fourth quarter is raised $5 to $268 per cwt. As a result, the 2024 forecast is raised to $258.50 per cwt, 18% above last year. That price strength was carried over into the 2025 feeder steer price forecast, which is $4 higher from last month at $263 per cwt.
Slaughter steer prices in the 5-area marketing region established a new record for the week ending July 7 of $197.09 per cwt. This was likely buoyed by a boost in packer margins supported by strong comprehensive wholesale boxed beef values in the same week. Through the first half of 2024, the average weekly comprehensive value is 3% above the same period last year. Boxed beef prices have since pulled back from the high established the first week of July, and slaughter steer prices have followed. The June average price for fed steers in the 5-area marketing region was $193.33 per cwt, almost $6 above the record monthly price set the previous month and almost $9 higher year over year. Based on recent data and expectations of continued firm packer demand, the third-quarter 2024 slaughter steer price forecast is raised $7 to $190 per cwt, and the fourth quarter is raised $2 to $188 per cwt. The forecast for 2024 is raised to $186.86 per cwt, a year-over-year increase of more than 6%. Based on a faster-anticipated pace of marketings in 2025, next year’s slaughter steer price forecast is raised $2 from last month to $191 per cwt.
Firm demand keeping U.S. beef exports stronger than expected
Monthly beef exports in May were 259 million pounds, 3% lower year over year. Monthly exports to Japan were about 14% higher year over year, and exports to Mexico were 15% higher year over year. These increases were more than offset by decreases to Canada, South Korea, China and Taiwan. However, monthly exports to smaller markets outside the top six were also higher year over year by about 23%.
Year-to-date exports through May were about 5% lower than a year ago. Of the top six markets, only exports to Mexico are higher year over year; however, Table 1 shows that exports to countries comprising the rest of the world (ROW) are about 2% higher than the same period last year. Aside from Mexico, the largest increases in year-to-date exports were to Cuba, Philippines, United Arab Emirates, Guatemala, Qatar, Kuwait, Panama, Dominican Republic, Singapore and the Cayman Islands, accounting for a cumulative increase of 21 million pounds over last year. For some of these markets, recovering tourism industries help drive demand for U.S. beef.
The global demand for U.S. beef has been firmer than initially expected. Exports had been extremely strong in 2021 and 2022 but fell 14% in 2023. Exports are still expected lower year over year for 2024 but by a smaller percentage. The forecast for second-quarter exports is raised 40 million pounds to 780 million, while the third- and fourth-quarter forecasts are raised 30 and 20 million pounds, respectively. The annual forecast for 2024 is 2.91 billion pounds, a 4% decrease year over year. The annual forecast for 2025 is unchanged from last month at 2.5 billion pounds.
Demand for lean trimmings keeps imports high
May beef imports were 343.5 million pounds, a year-over-year increase of about 10%. Driving the increase were imports from Australia, Uruguay, Argentina and Brazil, up by a combined 40 million pounds. This was partially offset by a 13 million-pound decrease in imports from Mexico.
Table 2 shows year-to-date imports are up about 19% year over year. Canada remains the top supplier of beef imports to the U.S. Australia has quickly moved up to the second largest supplier this year, with the share of imports from Australia increasing from 13% in 2023 to 20% in 2024. Imports from Mexico are down about 19% through May this year.
Cow slaughter through May was down about 13%, while steer and heifer slaughter was nearly unchanged. However, factoring in the heavier weights of steers and heifers this year, production from steer and heifer slaughter through May was about 2% higher year over year. Increased fat trimmings from steer and heifer slaughter require more lean trimmings to mix into ground beef. However, lower cow slaughter means decreased domestic lean trimmings, which has driven up the demand for imported lean beef. Australia has had the supplies this year to step in to fill that demand, as have some of the smaller suppliers, including Uruguay and Argentina. Additionally, imports from Brazil are up 16%, implying some out-of-quota imports, as the tariff-rate quota under which imports from Brazil fall was filled by March of this year.
The second- and third-quarter import forecasts are unchanged from last month at 1 and 1.03 billion pounds, respectively. The fourth quarter and 2024 annual import forecasts are lowered 25 million pounds to 925 million and 4.15 billion pounds, respectively, on expected weakness from North American suppliers. The annual import forecast for 2025 is unchanged from last month at 4.23 billion pounds.
