US beef production and carcass weights increase
According September Livestock, Dairy and Poultry outlook from the United States Department of Agriculture (USDA) record beef production and slaughter weights will continue to burden the cattle market in the short term. However, the outlook for good beef movement and reduced on-feed and total cattle inventories are positive in the longer term.
As feedlot inventories become more current this autumn, prices are expected to move above year-earlier levels and average in the upper $60s per hundredweight (cwt). Prices are likely to move above $70 per cwt this winter and near the mid-$70s by late spring before averaging in the mid- to upper-$70s in the second half as supplies tighten.
Cattle on feed inventories on September 1 in the 7-monthly reporting States were down 6 percent from a year earlier. Fed cattle marketings in August were down 3 percent from a year earlier. However, September steer and heifer slaughter was likely above a year earlier and third quarter steer and heifer slaughter was up nearly 3 percent. August feedlot placements rose 2 percent, thus together with lower marketings, the September on-feed inventory rose marginally during August. Front-end supplies remain large and together with continued record weights will hold up beef production over the next couple of quarters.
Continued large fed cattle marketings at record slaughter weights likely resulted in record beef production in the third quarter and pushed this year’s record production above 27 billion pounds for the first time in history, the report notes. Steer dressed slaughter weights in September were averaging over 20 pounds above a year earlier, while heifer weights were nearly 15 pounds heavier than last year's record. Also pushing up production is a sharp increase in dairy cow slaughter as the industry culls larger numbers of less-efficient cows.
Third quarter dairy cow slaughter rose nearly 11 percent over a year earlier, while first-quarter slaughter was down 11 percent and spring slaughter was unchanged from a year earlier. Beef cow slaughter also rose in the third quarter, but less than 1 percent. Pressures resulting from the summer drought, declining forage conditions, and higher feed costs are likely to force continued large cow slaughter until spring. A more severe winter would force slaughter even higher, the report concludes.
