The latest Cattle on Feed report, published by the USDA National Agricultural Statistics Service (NASS), estimated the Aug. 1 feedlot inventory at 11.095 million head, less than 1% above 11.064 million head in the same month last year. Feedlot net placements in July were nearly 7% higher year over year at 1.646 million head.
Marketings in July tallied 1.855 million head, up nearly 8% year over year. On a per-day basis, however, marketings were about 2% lower due to the two additional slaughter days in July 2024. The year-over-year increase in marketings was largely expected with a large share of cattle on feed over 150 days. For example, two of the largest cattle-feeding states – Kansas and Texas – held 12% and 32%, respectively, of their share of cattle on feed over 150 days on Aug. 1 (Figure 1). As a result, these feedlots had more market-ready cattle available than at the same time last year. Nebraska, the state with the second-largest number of cattle on feed, has about 5% of its cattle on feed over 150 days, but it is lower than last year. Nonetheless, market conditions are encouraging feedlots to add weight to carcasses, allowing packers to offset fewer cattle supplies.
Reflecting on the anticipated pace of cattle slaughter in 2024, the beef production outlook for 2024 is fractionally higher than last month at 26.795 billion pounds. Third-quarter beef production is increased as recent slaughter data point to fewer bulls in the slaughter mix, which is more than offset by higher anticipated cow slaughter and average carcass weights.
In the fourth quarter, production is fractionally raised 40 million pounds from last month, based on minor adjustments upward to anticipated steers and cows in the slaughter mix, as well as heavier expected carcass weights. These adjustments more than offset lower anticipated bull slaughter.
For 2025, the beef production forecast is also raised 180 million pounds from last month to 25.625 billion pounds. Production is raised on higher expected fed cattle slaughter and heavier expected carcass weights. The relatively large number of placements in July raises expectations for overall placements in third-quarter 2024. As a result, anticipated marketings in first-quarter 2025 are raised to reflect an increase in expected placements. Further, steers and heifers are spending more time on feed than a year ago in two of the three largest cattle-feeding states. This trend of feeding cattle to heavier weights appears unlikely to change soon, resulting in a relatively slow pace of marketings.
Beef prices and sales soften after summer grilling season
Weekly comprehensive boxed beef prices have declined seasonally since peaking the first week of July 2024, losing more than $12, and remain just above a year ago. At the same time, slaughter cattle prices have fallen at a faster rate than wholesale beef prices, dropping almost $16 from its peak the same week. This situation has allowed packer margins to improve during this time.
Even as beef prices have fallen about 4% since the peak, beef prices remain above a year ago, as the prices have for most of the year, as depicted in Figure 2. In Figures 3 and 4, the percent of beef sales for delivery 0-21 days and 22-60 days are graphed out. Typically, when prices are at their highest levels, purchases for delivery (on shorter time frames) rise and vice versa. As such, the percent of beef sold for delivery 22-60 days out remained persistently below year-ago levels. However, in Figure 3 for the percent of beef sold 0-21 days out, the percent of nearby sales are below a year ago, despite beef prices being so close to last year.
Cattle prices are forecast lower
The August average price for slaughter steers in the 5-area marketing region was $189.39 per hundredweight (cwt), about $5 lower from July but $5 above August last year. Accounting for recent price declines since early July, softening beef sales for delivery 22-60 days and the large proportion of cattle on feed ready to be marketed, the third-quarter price forecast for slaughter steers is reduced $5 to $188 per cwt, and the fourth quarter is lowered $7 to $183 per cwt. That price weakness was carried into 2025, and the forecast of the annual prices is lowered $4.50 to $186.25 per cwt.
In August, the weighted-average price for feeder steers weighing 750 to 800 pounds at the Oklahoma City National Stockyards was $247.28 per cwt. This price was a decline of $15.78 from July and the first year-over-year decline since February 2021. In the sale on Sept. 9, feeder steers continued a nine-week decline to $240.27 per cwt since peaking at $268.73 on July 1. Accounting for recent price weakness, the third-quarter price forecast for feeder steers is reduced $9 to $252 per cwt, and the fourth quarter is lowered $13 to $255 per cwt. This price weakness is carried into 2025, and the forecast of the annual price is lowered $3.25 to $258.75 per cwt.
U.S. beef exports remain steady
Monthly U.S. beef exports have remained steady at around 260 million pounds since March this year, coming in at 258 million pounds in July, nearly 8% higher year over year (Table 1). It is the first time this year that monthly exports have been higher year over year. Exports in July were higher than a year ago for nearly all top six major markets, including Taiwan (19%), Japan (13%), Mexico (11%), China (4%) and South Korea (1%). Of the top six global markets, only exports to Canada were lower, down 5%.
Monthly beef exports to Japan have remained year-over-year higher since April, and total year-to-date exports through July now edged just above last year. Exports to Mexico have remained higher year over year throughout most of the year (excluding March), and year-to-date exports are 14% higher compared to the same period last year. Exports to other markets outside the top six have also remained strong this year, up 4% year to date.
Based on continued strength in global beef demand, third- and fourth-quarter forecasts for 2024 are raised 25 million pounds each to 750 and 725 million pounds, respectively. This number brings the annual export forecast to 2.99 billion pounds, which would be about 11.2% of total commercial beef production, compared to an average of 11.6% over the previous five years. The quarterly forecasts for 2025 are also raised 25 million pounds each, for a total increase of 100 million pounds to 2.6 billion for the year. If realized, this number would be an estimated 10.1% of total commercial beef production.
Beef imports continue strong from South America and Oceania
U.S. beef imports in July totaled a massive 403 million pounds, the second-largest monthly import level ever, behind January of this year. This number was 86 million pounds, 27% higher year over year. The largest increase was imports from Brazil, up 42 million pounds and 186% year over year. Beef imports from Brazil are subject to a tariff-rate quota, which has been filled since early this year. Although beef trimmings prices have leveled off in August, the spread between domestic and imported trimmings prices continues to be very high, offsetting some of the pressure the out-of-quota tariff would otherwise cause. Brazil has been exporting large amounts of beef this year, but in June and July, beef imports in China – Brazil’s largest market – slowed, leaving excess beef to be absorbed by other markets, including the U.S.
Also contributing to the large U.S. beef imports in July were year-over-year increases in imports from Australia and Uruguay. Imports from Australia in July were 28 million pounds (48%) higher year over year. Imports from Uruguay were 21 million pounds higher, more than triple the amount in July of 2023. Figure 5 shows the quota fill rates as of the first week in September, compared to the same period last year. The quotas for Argentina and Uruguay are more than 70% filled, while Australia’s quota is just over half filled. The “other countries" quota has been filled since February.
Table 2 shows that Canada remains the largest supplier of beef imports to the U.S. this year, though monthly imports have dropped below year-ago levels for the last two months. Imports from Mexico have been lower year over year throughout 2024. The share of imports from North American countries has fallen to 35%, compared to 44% last year, with growth in the share of imports from Oceania and South America increasing significantly this year.
Based on continued demand for imported beef trimmings and ample supplies from Oceania and South America, the beef import forecasts are raised from last month. The third-quarter 2024 forecast is raised 100 million pounds to 1.14 billion, while the fourth-quarter forecast is raised 40 million pounds to 980 million. The 2024 annual forecast is 4.328 billion pounds, a year-over-year increase of 16%. The annual forecast for 2025 is also raised 110 million pounds to 4.335 billion pounds to remain nearly unchanged year over year.
