The beef cattle industry continues to grapple with tight supplies, even as there has been growing optimism about filling the pipeline in the coming months. While cattle producers are enjoying record-high prices for their livestock, the steep costs involved in replenishing herds are causing many to hesitate on expanding their operations.
The latest USDA monthly Cattle on Feed Report reveals declines across the board, with on-feed numbers, placements, and marketings all dropping between two and three percent. This suggests that despite the optimism, the pipeline remains constricted.
Adding to the picture, USDA’s Cold Storage Report released Friday showed that total red meat supplies held in freezers increased by five percent compared to the previous month, but remain six percent lower than the same time last year. Specifically, frozen beef supplies fell two percent from the prior month and also were two percent below last year’s levels. Conversely, frozen pork stocks surged, rising 11 percent from the previous month.
The cash cattle market was quiet yesterday, reflecting the cautious approach from buyers and sellers alike. Last week’s trade saw live cattle prices ranging between $219 and $221 per hundredweight, with dressed cattle (meat) prices between $360 and $367. The boxed beef market remains robust, with select cuts trading near $360 and choice cuts close to $361.
Industry watchers will be closely monitoring upcoming reports to see if supply constraints begin to ease, but for now, cattle producers face a delicate balance between high prices and high replacement costs in a market marked by tight supplies.
Here's John Jenkinson's Ag Minute: