Beef Herd Continues To Contract
The latest USDA numbers show the size of the U.S. beef cattle herd continues to shrink. Last week’s Cattle On Feed report shows placements into feedlots during January were down 4%, feed lot inventories on February 1st came in at 11.7 million, resulting in a 4% contraction from February 2022. An the USDA is projecting that the herd contraction will continue further into 2023. USDA economist Justin Cho at last week’s USDA Outlook forum reported that just a few weeks ago.
“Farmers reported that they will retain about 6% fewer replacement heifers, and about 5% fewer heifers are expected to calve.”
This is leading to a 6% decline in beef production this year. And of course, he noted that prices are going to reflect that.
“We project our steer prices to go up about $15 above what we had in 2022.”
That comes out to a roughly 10% increase in steer prices with an average $159 cwt.
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