There was no USDA National Agricultural Statistics Service (NASS) July Cattle report in 2024 providing an estimate of the cattle inventory on July 1. However, the NASS Cattle on Feed report breaks down the number of steers and heifers in feedlots with capacity of 1,000 head or more on July 1. To some degree, this can reflect the sentiment of cow-calf producers’ willingness to retain young females for breeding during the first half of the year. From Cattle on Feed, it is estimated that on July 1, 6.824 million steers and 4.48 million heifers were on feed, an increase of 0.8% and 0.1%, respectively, from a year ago. Lacking the number of breeding heifers that cow-calf producers are intending to retain this year, the number of heifers on feed suggests that herd expansion could be delayed further as producers appear to be capitalizing on strong calf prices.
One contributing factor to the number of heifers in feedlots is the increase in feeder cattle from Mexico. Based on weekly data from the USDA Agricultural Marketing Service report U.S. – Mexico Livestock Imports/Exports for January through June, importation of feeder heifers from Mexico increased 91%, or 126,210 head, compared to the same period last year. Further, the proportion of heifers imported from Mexico jumped from 23% to 36% of total feeder calves from Mexico in the same period last year.
Changes to pace of cattle slaughter raise 2024 production
The outlook for 2024 beef production is raised 81 million pounds from last month to 26.736 billion pounds. This reflects a slightly faster than previously expected pace of cattle slaughter projected through the end of the year. The NASS Cattle on Feed report for July 2024 estimated the July 1 feedlot inventory at 11.304 million head, less than 1% above 11.243 million head in the same month last year. Based on the report, feedlot net placements in June were more than 6% lower year over year at 1.507 million head. The increase in net placements from a year ago was slightly more than anticipated. This resulted in a shifting of expected marketings from early 2025 to late 2024. In addition, the pace of cow slaughter has not slowed as much as previously expected.
Beef production for 2025 is adjusted slightly lower from last month by 20 million pounds to 25.445 billion pounds, based on an adjustment to the first quarter. As noted, the anticipated pace of fed cattle marketings in second-half 2024 pulled marketings out of first-quarter 2025.
Slaughter steer prices projected higher on price strength
In July, the weighted-average price for feeder steers weighing 750 to 800 pounds at the Oklahoma City National Stockyards was $263.06 per hundredweight (cwt). This was a slight decrease from the previous month but nearly $19 higher than July 2023. In the sale on Aug. 5, feeder steers averaged $246.66 per cwt, $12.49 below the previous week and $1.26 below the same week a year ago. Accounting for recent price weakness, the third-quarter price forecast for feeder steers is lowered $2 to $261 per cwt, but the fourth quarter is unchanged from last month at $268 per cwt. The 2025 forecast is unchanged from last month at $262.50 per cwt.
In first-half 2024, weekly boxed beef values and fed steer prices in the 5-area marketing region followed a similarly strong trajectory over the period. However, weekly boxed beef values retracted from the peak set the first week of July, and slaughter steer prices followed as shown in Figure 1 for weeks 27 to 32. With record prices for slaughter steers recorded last month, the July average price for slaughter steers in the 5-area marketing region was $194.82 per cwt, a slight increase from June and about $11 higher year over year. Based on daily price data to date in August and a slightly faster pace of marketings in the third quarter, the third-quarter 2023 slaughter steer price forecast is raised $3 to $193 per cwt, and the fourth quarter is raised $2 to $190 per cwt. The 2024 average price is forecast at $188.11 per cwt, an increase of more than 7% from 2023. The forecast for first quarter 2025 is raised $1 to $189 per cwt as the price strength was carried over into next year. The 2025 average price is forecast at $190.75 per cwt, an increase of more than 1%.
Beef exports
Beef exports in June were 264 million pounds, just over 2% lower year over year but less than 1% higher than the five-year average from 2019 to 2023 (Table 1). Shipments to Canada jumped to nearly 31 million pounds, 20% higher than a year ago, while exports to Taiwan rose to almost 23 million pounds, just over 1% higher year over year. Exports to markets outside of the top six were also strong again in June, coming in 2% higher than last year. Exports to Japan were also higher year over year for the third month in a row. Monthly exports to South Korea bounced back slightly, though still below year-ago and five-year-average levels.
Exports for the second quarter totaled 782 million pounds, about 3% below both last year and the five-year average. The largest year-over-year decrease among the top six markets was in exports to South Korea, down 18%, while exports to China were down nearly 15%. However, second-quarter exports to Japan were nearly 9% higher and exports to Mexico were up 18% year over year. Exports to smaller markets not in the top six were almost 6% higher year over year.
Figure 2 shows the volume and value of U.S. beef exports for the first half of the year. The volume of exports for the first six months decreased about 4% compared to the same period last year. The value of U.S. exports in the first half totaled about 2.3 billion dollars, a 6% increase year over year.
U.S. beef exports in the second quarter were aided by year-over-year higher dressed weights that boosted production, as well as by firm demand from some traditionally major markets (e.g., Mexico and Japan) and several smaller markets (e.g., Philippines, United Arab Emirates, Kuwait, Qatar and Guatemala). This offset factors such as the higher price of U.S. beef, a relatively stronger U.S. dollar and increased export competition from Australia.
Based on the firmer-than-expected demand in several key markets, the forecasts for third- and fourth-quarter exports are raised 15 million pounds to 725 million and 700 million, respectively. This results in a 2024 annual forecast of 2.94 billion pounds, which would still be about a 3% decrease year over year. Figure 3 shows the forecasts for the next four quarters compared with previous years. The quarterly forecasts for 2025 are unchanged from last month, with the first half totaling 1.325 billion pounds, which would be a year-over-year decrease of about 13%. The annual forecast is 2.5 billion pounds, a forecast year-over-year decrease of 15%.
Beef imports
U.S. beef imports totaled 342 million pounds in June, 16% higher year over year and 17% higher than the five-year average. Once again, imports from Australia accounted for the largest portion of the year-over-year increase, up 75% from last year. Imports from Brazil were up nearly 51% year over year and imports from New Zealand were up 13%. Imports from smaller suppliers, including Argentina and Uruguay, were higher as well. Monthly imports from North America in June were significantly smaller than last year, with imports from Canada falling below 70,000 for the first time since 2021. Throughout 2024, imports from Mexico have been consistently lower than the same period a year before.
Second-quarter imports totaled 1.012 billion pounds, a year-over-year increase of 12%. Leading that increase were imports from Australia, up nearly 59% year over year. The second-highest increase by volume in quarterly imports was from Uruguay, up almost 25 million pounds over the same period last year; Argentina sent nearly 13 million pounds more compared to last year. Table 2 shows year-to-date imports through June for the top five suppliers. Imports from Australia continue to make up a much larger share of total imports compared to a year ago.
The third-largest source of imports in the first half of the year was Brazil. Imports from Brazil are subject to a tariff-rate quota that is open to all countries without a specific quota or free trade agreement. Once the quota is filled, further imports are subject to a higher tariff rate. A majority of fresh beef imports from Brazil are lean trimmings destined for grinding with fat trimmings for ground beef product. Cow slaughter (which results in mostly lean trimmings) continues to be below last year. Strong demand for lean beef trimmings in the U.S. is evidenced by rising prices of trimmings, both domestic and imported. Figure 4 shows imports of frozen boneless beef from Brazil, both in-quota and out-of-quota, as well as the spread between the domestic trimmings price and the unit value of these imports from Brazil. The high prices for lean beef trimmings in the U.S. makes it an attractive market despite the higher tariff. Out-of-quota imports of frozen boneless beef from Brazil through June are more than three times higher than in the same period last year.
Increased imports from Oceania and South America will only be partially offset by lower imports from North America. Therefore, the forecasts for the remaining two quarters of 2024 are raised 15 pounds each, to 1.04 billion pounds and 940 million pounds, respectively. This brings the annual 2024 forecast to 4.188 billion pounds, a year-over-year increase of more than 12%. The annual forecast for 2025 is unchanged at 4.225 billion pounds.
