Upon Friday's unveiling of a bullish USDA Cattle Inventory report -- and a better-than-expected Cattle on Feed report -- cattlemen can see optimism building in the marketplace.
July's Cattle on Feed Report shared that July 1 on feed figured totaled 11.3 million head (99% of a year ago), cattle placed in June totaled 1.67 million head (93% of a year ago) and cattle marketed in June totaled 2.02 million head (103% of a year ago). It's astonishing to see that total number of 2,022,000 head, as that's the largest number of cattle marketed in June since 2011 when a total of 2,102,000 head were marketed.
Friday's good news didn't only consist of the Cattle on Feed Report, but also of the latest Cattle Inventory report, where lower-than-expected figures were shown. USDA showed cattle inventory totaled 100.9 million head on July 1, which is down 2.0% from last year's report of 103.0 million head, but down 1.3% from USDA's revised inventory of 102.2 million head for 2020. Beef cows totaled 31.4 million head, down 2% from USDA's total of 32.05 million head for 2020. The national calf crop on July 1 totaled 35.1 million head, down 2% from last year's reported total of 35.8 million head, but only down 0.1% from USDA's revised total of 35.135 million head for 2020.
It may seem reasonable to shake your head in frustration at the USDA for having to do so many revisions on the latest Cattle Inventory report (which are incredibly easy to miss if you're not careful), but given the irregular circumstances in which the market has been put through in the last three years, pinpointing just how many cattle are in the countryside is by no means an easy job.
Instead of focusing on the Cattle Inventory's revisions, I think it's more important to focus on the big picture of the market -- for both here and now, and later down the road. Currently, we know that industry is undergoing a massive liquidation phase and has been for the last year. So, it's safe to assume that once this cycle runs its course, the cow herd will again begin to grow. In the meantime, producers face difficult decisions. How do producers in the West keep as many females as they can amid outlandish input costs and to avoid paying higher female prices in the years to come? And for producers in the East, even though their feed situation is better, it's still hard to find more leases as the competition for grass has never been this thick before.
Thankfully, feeder cattle prices have been far better than what most assumed they would be and with corn prices continuing to drift lower, and the April live cattle contract for 2022 trading confidently at $139 to $140 -- the feeder cattle market has a lot to be excited about.
The challenge always is to understand how one overcomes today's trials in order to thrive in tomorrow's successes. And in terms of the cattle market, those decisions can change as the market's fundamental dashboard is fickle.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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