Cattle traders will turn their attention this afternoon to dual USDA reports – Cattle on Feed and the semi-annual Cattle Inventory report.
Analysts expect the Cattle on Feed report to show a continuing of slower feedlot placements during June, while the Inventory report will likely confirm further herd liquidation.
Yesterday USDA announced commercial red meat production in the U.S. totaled 4.16 billion pounds in June, an increase of 3 percent from the 4.05 billion pounds produced in June of last year. Beef production was up one percent, at 2.29 billion pounds as cattle slaughter totaled 2.98 million head last month, also a one percent increase from last year. The average live weight was up 8 pounds from the previous year at 1,269 pounds.
Larger beef production last month suggests to analysts that today’s Cattle on Feed report will show cattle marketings will be one percent higher. But the big news from today’s report is likely to be the number of cattle placed on feed. Poor feedyard margins and few hedging opportunities suggest June placements could be down substantially.
The semi-annual Cattle Inventory report is expected to show further decline in the cow herd. Analysts say the decline is a foregone conclusion, since drought, higher feed and energy prices and lower ranch profitability have combined to force cows to market.