U.S. beef production declines

U.S. beef production is declining this year as expected, but it’s not falling as fast as expected, according to the latest quarterly report from CoBank. Over the past three months, cattle have stayed in feedlots longer and gained weight. However, these heavier weights are contrary to the seasonal trend.

Through the second quarter of 2024, weekly cattle weights are up 3% from year-ago levels to about 850 pounds per head . Cattle on feed increased 4% YTD to 70.5 million head, unchanged from a year ago in June.

Thanks to lower feed costs and improved weather conditions, cattle performed well. As beef markets have weakened, cattle prices have increased, resulting in lower incentives for meat processors and reduced slaughter schedules. At the end of June 2024, meat processors were losing $79 per head of cattle, while feeders were making a profit of $499 per head, resulting in a margin difference of $578.

This correlates with the fact that federally controlled cattle slaughter is down 4.4% since the beginning of the year. If weights remain high and slaughter volume remains low, experts expect these spreads to continue to widen.

Tags: Beef cattle, USA