USDA Predicts Tighter Cattle Supplies Ahead
Tuesday’s Cattle Report from the U.S. Department of Agriculture shows cattle inventories are three percent lower than last year as some Western farmers and ranchers have liquidated their herds. American Farm Bureau Federation Economist Bernt Nelson provides the numbers.
“All cattle and calves in the United States on January 1 were estimated at 89.3 million head. This was three percent lower than this time in 2022, and this is the lowest inventory since USDA’s 88.2 million estimate in 2014. The calf crop came in at 34.5 million. This is down two percent from last year. The calf crop is really important because it kind of sets the tone for what supplies will be like.”
Nelson says the futures market indicates that supplies will tighten throughout the year.
“If you look at August or October feeder cattle for example, we’re seeing prices really jump, and as we look at those that futures market is really telling us that these cattle supplies will become more important as we get into the later deferred months. So, taking that into consideration that really gives us a feel for the fact that we’re tight on cattle supplies this year.”
For consumers, Nelson says there is ample supply in cold storage to keep prices from pushing higher at the meat case, for now.
“We’ve seen prices kind of dropping back off a little bit as inflation has kind of set back a little bit. However, we have kind of eaten into some of our red meat supplies. We take a look at cold storage, and it’s started to decrease a little bit, but there’s still a lot of beef in cold storage, we are still well ahead of last year. And so, this should help keep prices at a more reasonable level for at least some time going forward.”