The USDA's recent report released on Friday, August 18, 2023, shared some interesting insights into the cattle market. Unlike the past few months, July saw an 8.3% decline in cattle placements, breaking a two-month trend. This drop places the annual number at 2.3% low the previous year. This change fits more clearly with the available feeder supplies and last year's calf crops.
What remains unanswered is the role of heifers in these placements. A sharp reduction might hint at a larger number of heifers being retained, possibly due to healthier pastures. We'll gain clearer insights with the forthcoming October report that will shed light on the number of heifers on feed.
Interestingly, every weight category reported lower placements, barring those above 1,000 pounds which equaled the previous year's number. Feeders weighing over 900 pounds made up 16.1% of the total placements, marking the highest for July since 2019. It's worth noting that such heavy feeder placements are a seasonal occurrence, usually peaking around August-September.
Another often-overlooked aspect is the 'Other disappearance' section. This July, it surged by 16%, which translates to 9,000 head more than the previous year. South Dakota and Nebraska accounted for the majority of this change.
As for the rest of the findings, marketings stood 5.3% lower than last year, resulting in a 2.3% reduction in Cattle on Feed. With fewer calves for placement and potentially more heifers joining the herd, this trend is likely to persist. These shifts suggest a sustained demand for cattle, calves, and beef, indicating higher prices in the market.
In market updates, there's a decline in beef grading Choice since May 20th, pushing the Choice-Select spread. Beef grading Prime increased by 0.67% and select dropped by around a quarter percent. Texas and the South also witnessed a rise in calf prices recently.
Photo Credit: USDA
Categories: South Dakota, Livestock, Beef Cattle