Despite cattle inventory plummeting to the lowest level in 73 years, the number of cattle on feed remains surprisingly strong, according to USDA’s October Cattle on Feed report which estimated all cattle and calves on feed were 11.6 million head on Oct. 1, 2024.
That’s just slightly below year-ago levels, according to American Farm Bureau Federation Economist Bernt Nelson, noting placements of cattle on feed were 2.16 million head, 2% below October 2023, while marketings of fed cattle were 2% above last year.
“The report indicates there are still plenty of fed cattle for packers to choose from, which typically leads to lower cash prices,” Nelson said. “However, if the pattern of smaller placements compared to marketings continues, this should result in fewer cattle on feed.”
That could be good news for producers, said Nelson, pointing out the price-trend discrepancy between producers and consumers. “The average all-fresh retail price for beef hit record highs in six of the last seven months, while the cash price paid to farmers fell from July to September,” he added.
Though cash prices have recovered in recent weeks, concerns over an emerging drought has the potential to play a major role in placements of cattle on feed over the next six months further reducing the overall cattle inventory and creating more uncertainty in the cattle markets.
The National Oceanic and Atmospheric Administration indicates there is a 60% chance of a La Niña developing and bringing dryer conditions to key cattle-producing regions of the country, likely elevating female cattle slaughter, resulting in continued cattle inventory contraction in 2025.
Turning to USDA’s October Livestock Slaughter report, September beef production was 2.2 billion pounds, up 3% from last year. Although slaughter numbers were down 1% at 2.57 million head of cattle, Nelson said record high average live weights at 1,406 pounds was 44 pounds higher than September 2023.
“Heifers and cows made up about 47.8% of September slaughter volume, down from 51% in September 2023. This significant difference may be an indicator that some female retention is occurring,” Nelson said.
With USDA no longer providing the July cattle inventory report, it’s impossible to know what the spring 2024 calf crop looks like, according to Nelson, with most analyst predicting the new calf crop is smaller than last year’s crop of 24.7 million head.
“However, the recent lower percentage of female slaughter could be an indicator that some female retention occurred in 2024. Even so, it will be a year before female calves from this generation are ready to expand the cattle inventory with a calf of their own,” he added.
