Beef Expansion Continues But At Slower Pace

On Friday, the USDA released it's cattle inventory and cattle-on-feed report.  The USDA's Shayle Shagam says the two reports combine to tell the same story.

"Although the expansion may not be over, it's definitely slowing down."

Currently, the reports show big numbers in and out of feedlots, inventories in feed lots with a 1,000 head or more capacity on July 1^st.  That is the highest figure since 1996, with inventories up 4% from a year ago.  And in the smaller feed lots, inventories also up 4% at 13.3 million head.  Cattle waiting outside feedlots are up 1% from a year ago, however, "We are seeing producers retaining fewer heifers for beef-cow replacement."

Heifers now account for 36.8% for total feedlot inventory, which is the highest percentage since 2012.  Beef replacement heifers on July first down 2% from a year ago, but, with big feedlot inventories now, replacements still topping a year ago.  Shagam said we're going to see some downward pressure on prices, until maybe the middle of next year.

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