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Economist says cattle margins could narrow

The USDA’s latest Cattle on Feed report shows an increased number of heifers placed into feedlots and an ag economist says that could signal some good news for cattle prices.

University of Missouri’s Scott Brown says the cattle herd isn’t growing.  “We haven’t held back a lot of replacement heifers,” he says.  “As I look at the next 12 to 18 months, right now nothing jumps out at me that says we’re going to have a big slug of beef production or cattle slaughter coming.”

But, he tells Brownfield, there are some concerns when looking at the overall cattle outlook.  “As we look ahead, the combination of no pasture in some parts of the country, as well as lower feeder cattle prices and higher corn prices, I think has certainly taken the polish off of some optimism that we had earlier,” he says. 

Placements in March came in at 128.3 percent, which is at the low-end of pre-report estimates, and the large number is skewed by last year’s significant drop in placements during the COVID-19 pandemic. On Feed on April 1 came in at 105.3 percent, also at the low end of pre-report estimates.