Earlier this year, it was expected that the number of cattle on feed would shrink year over year in the second half of 2024, based on smaller inventory levels at the beginning of the year, and that year-over-year higher calf prices would result in retention of heifers, limiting numbers in the feedlot. However, the October Cattle on Feed report, published by the USDA National Agricultural Statistics Service (NASS), estimated the Oct. 1 feedlot inventory at 11.6 million head, nearly flat from 11.604 million head for the same month last year. Feedlot net placements in September were 2% lower year over year at 2.1 million head. Placements more than offset marketings in September, which registered 1.7 million head, up 2% year over year. As a result, the number of cattle on feed on Oct.1 has been relatively flat since 2021 despite declining cattle inventories since 2019.
Despite the relatively high price of feeder calves, Figure 1 shows that the number of net placements to marketings has outpaced the 10-year average by more than one standard deviation for the months of September and August. When combined with a slower year-over-year pace of marketings, it has pushed the percent of cattle on feed over 150 days above year-ago levels. It also suggests a larger supply of fed steers and heifers that will be marketed in the coming quarters.
The October Cattle on Feed report provides a breakdown of the number of steers and heifers on feed. The number of steers on feed was slightly above last year, but heifers were almost 1% below last year. For the first time since July 1, 2023, there are fewer heifers on feed than a year ago, though not by much, which suggests that producers were not intent on retaining a substantial number of heifers. In Figure 2, note that heifers on feed on Oct. 1 are still above average for the current herd contractionary phase and the downturn of the previous cattle cycle (2007-14). Moreover, heifers on feed have averaged about 13% more on Oct. 1 than in the previous contractionary phase.
Based on weekly import data from the USDA Agricultural Marketing Service (AMS), imports of heifers from Mexico for the third quarter are up by more than 45,000 head, or 61%, from the same period last year. Although September imports of heifers from Mexico were down about 5% from September 2023, the relatively high number of heifer imports in the third quarter suggests that the number of heifers on feed on Oct. 1 is likely supported by imported heifers, particularly of Mexican origin.
Higher placements and heavier weights raise the 2025 production forecast
Reflecting actual and estimated slaughter data through early November, the production forecast in the fourth quarter of 2024 is adjusted 20 million pounds higher. Fourth-quarter 2024 is raised on heavier expected carcass weights and more cow slaughter than last month, which more than offsets fewer anticipated fed cattle slaughtered than last month. Including actual reported production data through September, the total 2024 beef production forecast is adjusted upward by 25 million pounds from last month to 27.03 billion.
As expectations are raised for cow slaughter in the fourth quarter, year-to-date cumulative cow slaughter is lower year over year. As depicted in Figure 3, it remains relatively strong in a historical review of previous periods of herd contraction. Based on weekly slaughter data reported by the USDA AMS for the week ending Oct. 26 (the 43rd week of the year), cumulative dairy and beef cow slaughter are 24% and 8% of their respective Jan. 1 inventories. For dairy cow slaughter, this is the slowest pace since 2008, but for beef cows, it is the slowest since just 2019.
The 2025 beef production forecast is raised 355 million pounds from last month to 26.28 billion pounds. This adjustment is based on more placements in September 2024 than previously expected and feeder cattle imports remaining strong, supporting higher expected placements in fourth-quarter 2024 than last month. In addition, anticipated placements in the first-half of 2025 are raised. Finally, heavier expected carcass weights in late 2024 are expected to carry over into 2025.
Cattle prices adjusted, remain historically high
Recently, weekly cattle prices have rebounded from September’s relative lows to establish new highs for October and November. They are forecast to continue elevated through 2025, reflecting recent price data and changes to the timing of cattle placements and marketings.
In October, the weighted average price for feeder steers weighing 750-800 pounds at the Oklahoma City National Stockyards was $254.19 per hundredweight (cwt). This was an increase of $7.41 from September and almost $11 above October 2023. In the first week of November, the price for feeder steers was untested, as heavy rains kept many calves from coming to the sale, with just 18 head of feeder steers weighing 750-800 pounds sold at $243 per cwt, a decline of almost $12 from the previous week. However, the fourth-quarter 2024 price forecast is raised $1 to $254 per cwt, as prices are expected to stay relatively flat for the quarter. The annual projection for 2025 feeder steer prices is $258 per cwt, down from last month’s forecast. Although the second-quarter forecast is raised on higher expected placement demand, for the year it is more than offset by lower prices in the third and fourth quarters compared to last month.
Comprehensive boxed beef values have increased 5% from their recent low in early October. However, that support seems to have waned in the first week of November, mainly on lower prices for end cuts from the chuck and round. Even so, wholesale beef prices remain at record levels for this time of year.
Figure 4 shows the four-week moving average for the percent of beef sales for delivery 22-60 days out. It appears that 2024 forward sales for delivery during the holidays are at or slightly below this time last year. However, it is important to follow the seasonal patterns as most medium-sized and large supermarket chains book beef four to eight weeks ahead of the delivery date for regular weekly deliveries. Spot sales for delivery zero to 21 days out are mostly above a year ago and above a standard deviation from the average, which still suggests greater just-in-time purchasing decisions for this time of year (Figure 5).
The October average price for fed steers in the 5-area marketing region was $188.62 per cwt, higher by more than $5 from September. Expectations for fourth-quarter prices are raised by $2 from last month to $188 per cwt based on recent price data and improved beef cutout prices. However, in 2025, a faster pace of cattle marketed for slaughter in second-half 2025 is expected to improve prices for an annual average of $188 per cwt.
Third-quarter U.S. beef exports slightly higher than expected
September beef exports totaled nearly 240 million pounds, about 4% higher year over year (Table 1). Monthly exports were up year over year to Japan, South Korea, Taiwan and Mexico. Exports to countries outside the top six were also strong in September, increasing 5 million pounds, nearly 14% over the previous year. Exports to China and Canada decreased 16% and 17%, respectively, year over year.
September exports rounded out the third quarter, bringing total exports to 735 million pounds for the quarter. This was just less than 1% higher than the same period last year but about 10% below the average from 2019-23. Year-over-year higher third-quarter exports to Japan, Mexico, Taiwan and other countries outside the top six offset lower exports to Canada, China and South Korea. Exports to Canada fell rapidly throughout the third quarter; after peaking at nearly 31 million pounds in June, they fell to less than 18 million pounds in September. Third-quarter exports to Canada were nearly 12% below a year ago.
Year-to-date exports to smaller countries not in the top six have been relatively strong throughout the year and were up about 4% year over year through September. Figure 6 shows the top year-over-year increases in year-to-date exports to smaller markets. Year-to-date exports to the Philippines have increased by nearly 10 million pounds over the same period last year. Despite high prices for U.S. beef, there remains a demand in the global market.
U.S. beef exports have remained stronger than expected throughout 2024, despite high U.S. beef prices and available exportable supplies from Australia and Brazil. Beef exports in 2024 are raised 5 million pounds to 2.96 billion, based on higher reported exports through the third quarter. Due to the greater expected U.S. beef supplies in 2025 and anticipated sustained global demand, the export forecast for 2025 is raised 25 million pounds in each quarter, for a total increase of 100 million pounds to 2.7 billion. If realized, exports would represent about 10% of expected production. Despite the upward revision to the 2025 U.S. beef export outlook, the projection remains below the 2024 forecast. In the first half of the year, exports are expected to fall about 6% compared to the first half of 2024, while they are expected to fall about 12% year over year in the second half of the year. This is consistent with the expected pattern of year-over-year changes in beef production throughout 2025.
Beef imports remain strong
U.S. beef imports in September were nearly 385 million pounds, a record for the month and the fourth-highest monthly import overall. Imports from Australia continue to climb, reaching 111 million pounds in September, 60% higher year over year. Imports from Canada have also climbed since June, reaching nearly 90 million pounds in September, less than 1% below a year ago. Canada and Australia are now nearly tied for the largest supplier of beef to the U.S. in 2024. Table 2 shows year-to-date imports from major suppliers; imports from Canada are just under 2 million pounds ahead of imports from Australia.
Imports from Brazil in September, while down from August, were still very high year over year. Similarly, imports from Uruguay and Argentina continue to be very strong compared to last year. Table 2 shows year-to-date imports from the rest of the world (other countries not in the top five) are up 44% from the same period last year. The largest contributors to this increase are Uruguay and Paraguay. Figure 7 breaks out the top five year-to-date increases in imports from the rest of the world countries. Combined, these five countries account for over 140 million pounds of additional beef imports to the U.S. compared to the same period last year. Beef imports from Paraguay are 31 million pounds this year after the country regained eligibility to export raw intact beef products to the U.S. in December 2023. Paraguay does not have a specific quota or free-trade agreement, so beef imports are subject to the “other countries” quota that has been full since February of this year and therefore face a higher out-of-quota tariff.
Third-quarter 2024 imports reached 1.21 billion pounds, an overall record for any quarter. Increased imports from Australia, Brazil and other smaller countries far offset decreases from Canada, Mexico and New Zealand. Given the continued strength in demand for imported beef trimmings and available supplies from Oceania and South America, the forecast for fourth-quarter imports is raised 90 million pounds to 1.09 billion. The annual forecast for 2024 is now 4.51 billion pounds. The annual forecast for 2025 is also raised 90 million pounds, bringing the annual forecast to 4.52 billion pounds, a year-over-year increase of less than 1%. According to the USDA Foreign Agricultural Service Production supply and distribution data, production in the top 10 beef suppliers to the U.S. is expected to be up less than 1% in 2025, constraining the potential for a larger year-over-year increase in U.S. beef imports compared to 2024.
