A pair of new reports from the U.S. Department of Agriculture (USDA) reveals an expanding beef cattle market in the U.S. and more cattle on feed than expected in December.
“Barring something unforeseen, we’ll be seeing the herd expand moving forward,” USDA Livestock Analyst Shale Shagam said in an interview with USDA’s Gary Crawford.
In fact, the Cattle Inventory Report reveals a greater expansion than some analysts expected.
As of Jan. 1, the U.S. cattle and calf inventory is up two percent over last year. Beef cows are up three percent. Replacement heifers are up one percent.
The number of cattle outside feedlots is up two percent.
The number of cattle on feed in December was also up, according to the monthly Cattle on Feed report.
The 17.6 percent jump over last December surprised many as most analysts were expecting placements of cattle into feedlots to only be about 8.5 percent higher.
“Some of their returns have been improving with gains in fed cattle prices or relatively low grain prices could have encouraged them to increase their placements,” Shagam said. “Some of those cattle that may have been bound for grass or winter pasture may have been placed in feedlots instead.”
The rise could pressure cattle futures prices for the spring when all the cattle that were put on feed in December start coming to market. In the meantime, Crawford said, wholesale beef prices have been falling.
“That may be putting some pressure on cattle prices in the coming weeks,” Shagam said.
As for the rest of the year, Shagam predicts more growth and expansion for the U.S. beef market.