Cattle supplies in focus heading into the new year

The recently released U.S. Department of Agriculture National Agricultural Statistics Service (NASS) Dec. 1 “Cattle on Feed” report was received as neutral when compared to industry analyst’s pre-report expectations.

November cattle marketings came in 26,000 head (-1.5%) below the prior year at 1.725 million head, which was close to the -1.8% decline in average pre-report estimates for cattle marketings. Part of the decline in cattle marketings can be explained by one less slaughter day in November compared to last year. November cattle marketings were higher than the prior year in Idaho (+1,000 head), Iowa (+3,000 head), Nebraska (+40,000 head), Oklahoma (+4,000 head) and Washington (+3,000 head). These were overshadowed by declines in California (-4,000 head), Colorado (-20,000 head), Kansas (-15,000 head), South Dakota (-3,000 head) and Texas (-35,000 head).

The number of cattle on feed as of Dec. 1 in feedlots of 1,000 head or more capacity was reported down slightly by 34,000 head (-0.3%) from a year ago to 11.982 million head. This was in line with pre-report estimates, which were expecting cattle on feed to be down, on average, less than 1% (-0.1%) from a year ago.

At the state level, increases in cattle on feed in December were reported for Colorado (+30,000 head), Iowa (+20,000 head), Nebraska (+20,000 head), Oklahoma (+40,000 head), Minnesota (+5,000 head) and South Dakota (+5,000 head). These increases were more than offset by declines in cattle on feed numbers in Arizona (-34,000 head), Kansas (-80,000 head), Texas (-30,000 head) and Washington (-10,000 head). California and Idaho remained level with the prior year.

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In November, the number of cattle on feed over 120 days was calculated to be just over 4 million head, which is a decline of about -3% from the prior year. This marks the first month of 2024 where cattle on feed over 120 days was below year-ago levels.

Pre-report estimates were all expecting November placements to decline from a year ago, with estimates ranging from down -7.4% to down -1.1%, with an average of -4.1% to about 1.789 million head. The actual number of cattle placed during the month of November was reported at 1.796 million head, a decrease of 69,000 head (-3.7%) from the prior year and within 0.4% of pre-report expectations. Of the 1.796 million head of cattle placed in November, 1.290 million head weighed less than 800 lb., a decline of 60,000 head from last year. The remaining 506,000 head of placements in November weighed over 800 lb., a decline of 9,000 head from the previous year.

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USDA’s Animal & Plant Health Inspection Service (APHIS) reporting the detection of New World Screwworm (NWS) in Mexico has resulted in a temporary suspension of bovine imports from Mexico, which took effect on Nov. 25, 2024. Last week APHIS released further information on the next steps in the process to start resuming the importation of ruminants from Mexico to the U.S. Further details on the new protocols can be found on the APHIS website .

A few key provisions from the new protocol include the identification and configuration of pre-export facilities by Mexico along with APHIS inspection of these facilities prior to use. As part of the protocol, administration of ivermectin will be required prior to cattle being delivered to the pre-export facilities. Then, before cattle are allowed to cross, they will go through a final inspection and get dipped.

APHIS anticipates a gradual resumption of cattle imports from Mexico could occur in January. Weekly data released by the USDA Agricultural Marketing Service (AMS) has reported no cattle imports from Mexico since the last week of November. Seasonally, cattle imports from Mexico reach their highest levels of the year in November and December. Last year, the U.S. imported 144,181 and 125,155 head of cattle in November and December, respectively, for a total of 269,336 head.

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As the year ends, cattle prices have been showing signs of strength. Since the start of November, steer calf prices (500-600 lb., medium and large #1) in the Plains region have seen gains of about $30-40/cwt. Compared to a year ago, recent weekly steer calf prices in the Plains region are tracking approximately $40-60/cwt. above year-ago levels. Feeder steer prices (700-800 lb., medium and large #1) in the Plains region are also posting gains over year-ago levels, with the last few weeks reporting increases of about $30-50/cwt. The fed steer weekly price (5-area weighted average) has risen about $10/cwt. since mid-November. Compared to a year ago, the fed steer price over the last few weeks has been tracking about $20-25/cwt. higher.

As we move into the new year, NASS will be releasing the annual “Cattle” report at the end of January, which details national inventory levels. This will be a key report for the cattle industry, giving a snapshot of available supplies for 2025, and will also start to paint the supply picture for subsequent years.

On the other side of the equation is demand. From a larger macroeconomic perspective, inflation, interest rates and the unemployment rate are just a few factors that will be watched closely in 2025. Looking closer at beef demand, retail beef prices over $8.00/lb. in recent months will be a driving factor into beef demand for 2025. Currently, evaluation of the various matrices for beef demand points toward robust beef demand heading into 2025.