The United States Department of Agriculture Economic Research Service (USDA-ERS) released the latest Livestock, Dairy, and Poultry Outlook on October 18, 2021. This monthly report provides an overview of production, use, exports, imports, and pricing. The full report is available here: https://www.ers.usda.gov/webdocs/outlooks/102400/ldp-m-328.pdf?v=1833.8. This article provides a summary of the beef outlook report.
2021 Beef Production Forecast
Because of heavier carcass weights and increased cow slaughter, USDA-ERS increased beef production to 27.8 billion pounds from the previous month’s report. The Agricultural Marketing Service collects slaughter weights each week as part of its Actual Slaughter Under Federal Inspection reports. As of September 25, the average carcass weight for cattle was 829 pounds. This is seven pounds heavier than the first four weeks of August 2021, but fourteen pounds less compared to September 2020. Dressed weights of steers and heifers were also heavier in September when compared to the previous month.
Slaughter numbers are higher. USDA NASS, in their Livestock Slaughter report, noted August beef and dairy cow slaughter was six percent higher than one year ago and September numbers were seven percent higher than the same month in 2020. Weak margins in the dairy sector and concerns about forage availability are likely contributing to these increased slaughter numbers. USDA-ERS expects these conditions to continue into the fourth quarter of 2021.
Cattle Price Forecasts – 2021
The five-area marketing region report for the first week of October put live steer prices at $122.56 per cwt. This is $15 higher than the same week in 2020. Large supplies of fed cattle pushed the fourth-quarter 2021 price forecast down $4 to $127 per cwt.
Feeder steer prices (750-800 pounds) at Oklahoma City National Stockyards averaged $152.55 per cwt for the week ending October 4, 2021. This is more than $8 above the average price from the same week last year. Based on the expectation of higher placements, the fourth-quarter price was lowered to $151 per cwt from the previous month’s estimate. The annual forecast for feeder steer prices for 2021came in at $144.80 per cwt.
Cattle Price Forecast – 2022
USDA-ERS raised the fed cattle price for the second half of 2022, based on demand and tighter supplies.
It is anticipated that feeder cattle supplies will be tighter in 2022. Based on this, USDA-ERS increased the annual forecast for feeder cattle to $155.50 per cwt.