Weather and pasture conditions in most of U.S. cattle country have improved. According to the Crop Progress report of the week ending August 9, 2015, 55 percent of pasture and range conditions are rated “good to excellent,” up from 50
percent a year ago (http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-08-10-2015.txt). With a favorable forage and pasture situation, producers continue to graze cattle and calves to heavy weights. Cattle on Feed, released July 24, 2015, reported that June 2015 placements of cattle weighing 800-plus pounds totaled 545,000 head—up 11 percent over June 2014. For June 2015, almost all major feedlot States have increased the number of steers and steer calves on feed in 1,000-plus-head feedlots, including the very heavy backgrounded cattle, compared with placed heifers and heifer calves (also down year over year). Producers are continuing to hold cattle on feed for over 150 days; the average liveweights of finished cattle have been reported by the Agricultural Marketing Service to be over 1,330 pounds. Further, the July 1, 2015 Cattle on Feed reported a 7-percent decline of heifers and heifer calves on feed on 1,000+ capacity feedlots, more evidence of herd rebuilding. The total number of cattle on feed in 2015 is expected to surpass the 2014 annual total, but total 2015 placements and marketings are both projected to decline compared with last year. It is likely that producers will continue to hold back cattle, given favorable feed prices and pasture conditions. Consequently, an increase in the number of placements and marketings is expected in 2016.
Unlike the Southern Plains and the Midwest, some regions of far-Western States are experiencing “D4” conditions and wider areas are experiencing “D2” and “D3” conditions, while wildfires have affected parts of California (according to the August 4, 2015, U.S. Drought Monitor, http://droughtmonitor.unl.edu/Home.aspx). As a result, the drought-stricken areas are likely to push their cattle onto feedlots at lighter weights than their Southern Plains counterparts.
The July Cattle report released on July 24, 2015, revealed that the July 1 U.S. cattle and calves inventory totaled 98.4 million head, an increase of 2 percent compared with a year earlier. Heifers weighing 500-plus pounds for beef cow replacements showed a 7-percent increase compared with July 2014. The report showed dairy herd increases as well—up 1 percent from the previous year. The Cattle report does not document State-by-State head counts, making it difficult to pinpoint the exact locations of herd expansion. The report estimates that this is the first July 1 cattle inventory increase since 2006. Table 1 provides a breakdown of cattle inventory by class and calf crop.
The 5-Area steer prices have been ranging between the upper $140s per hundredweight (cwt) to the low $150s per cwt in July and early August. USDA projects prices to average $148-$152 per cwt for third quarter, 5 percent below the same period last year. Fourth-quarter steer prices are expected to be $148-158 per cwt, an 8-percent decline from 2014 price levels.
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Source: USDA