Economist says cattle supplies will continue to tighten

The USDA’s latest Cattle on Feed report is extremely bearish, with both On Feed totals and Cattle Placed well outside the top-end of pre-report expectations.

University of Missouri’s Scott Brown says that could lead to a very interesting last half of the year.  “Drought has certainly made us want to place cattle in feedyards earlier than normal,” he says.  “It makes me wonder, are we going to run out of cattle by the end of this year.  If we keep placing them at the rate that they are, I don’t think we can continue to do that.”  This report also included heifer on feed information, and Brown says there is no indication producers are holding back replacement heifers.

USDA’s Livestock Slaughter report also released this/last week showed that Beef Cow slaughter was well above year-ago levels.  Brown says when supplies get tight they’re going to get really tight.  “We’re early in this discussion and I think later in 2022 and into 2023 is when we start seeing tighter supplies of slaughter-ready cattle.  Not today.”

He says that could have some serious implications at the grocery store.  “And if we’re right about how short cattle supplies could get, we’re not finished talking about higher beef prices,” he says.

Brown says even if expansion started now, it would take a long time before the industry showed some growth.

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