The U.S. cattle inventory as of January 1, 2024, is at its smallest in 73 years, with 87.2 million head, down 2% from the previous year. The calf crop is also at its lowest since 1948, with 33.6 million head. Despite historically low cattle numbers, the supply of cattle on feed remains high. Beef production in 2023 decreased by 2% but had record-high dressed weights. The decrease in inventory, coupled with higher weights, has influenced the forecast for 2024 commercial beef production.
Implications and Analysis:
The low cattle inventory is considered for the market, setting the tone for cattle markets in 2024.
Despite the low inventory, there is a curiously high supply of cattle on feed, likely maintaining stable beef prices in the short term.
Beef production in December 2023 was below the previous year, but higher weights contributed to a record-high average. This, coupled with the smaller calf crop, has led to forecasts of increased beef prices in 2024 and 2025.
Despite higher prices, domestic consumer demand for beef remains strong. However, there is an expectation of a decline in consumer willingness to pay, potentially impacting consumption.
The overall outlook for the U.S. cattle industry in 2024 suggests both opportunities and challenges. While low cattle numbers may provide profitability for cattle businesses, a smaller calf crop and potential supply chain challenges could lead to record beef prices for consumers. The ability of consumers to withstand higher prices will play a crucial role in determining the industry's trajectory in the coming year.