The USDA National Agricultural Statistics Service (NASS) released its midyear Cattle report on July 21, offering an important update on cattle inventories. The report confirmed that the U.S. cow herd has continued to decline through the first half of the year.

Since January, slaughter data has indicated a 12% decline in beef cow slaughter. This is likely a combination of improving pasture conditions, sufficient reductions in animal units per acre on poorer pastures and the prospect of improved profitability from selling calves.

Beef exports in May, while trending below last year’s record levels, have, in many international markets, reached the highest levels so far in 2023, according to data from the U.S. Meat Export Federation.

The USDA released its monthly Cattle on Feed report on June 23, indicating a 3% decrease from year-ago levels. On feedlots with more than 1,000 head of capacity, 11.6 million cattle are on feed for slaughter in the U.S. Feedlot placements for the month of May totaled 1.96 million head, up 5% from 2022, with net placements at 1.88 million head.

April’s beef exports were 10% below last year’s levels, while value fell 18%.

With generally improving pastures and lower expected feed costs this year, the demand for feeder calves is well supported.

Since October 2022, drought conditions have improved for much of the country, to the point where less than 24% of the U.S. is under drought conditions.

Beef production from cattle and calves dropped 1% in 2022 to 45.7 billion pounds, while total production from cattle, calves, hogs and pigs jumped up to 86.3 billion pounds.

The forecast for first-quarter beef production is lowered 25 million pounds, based on USDA Agricultural Marketing Service reports of federally inspected livestock slaughter, showing a slower pace of fed cattle slaughter and lower aggregate carcass weights than expected last month.

Policymakers need to understand the role multi-plant coordination plays in the fed cattle market as they consider policies aimed at increasing negotiated trade with the hope of improving price discovery.