Low Cattle Numbers, High Packer Interest
We are seeing right now over 60% of the contiguous United States showing some level of drought. It’s impacting our cattle markets. It’s impacting our cattle inventory.
Looking at the latest cattle on feed report, American Farm Bureau Federation Economist Bernt Nelson says placements were down the most in drought-stricken states…
“We've seen marketings for fed cattle totaling 1.86 million head for September, this is four percent above this time in 2021. Now, when we really see marketing high and placements become lower over a longer drawn out period of time, this really signals that lower cattle supplies are in the future.”
Additionally, the USDA’s Livestock Slaughter Report shows higher beef slaughter numbers…
“So on October 26, we had 129,000 head processed. So, what we're seeing here is when the packer really starts trying to reach out and get a hold of these numbers ahead of time, this really tells you that they need to get their hands on cattle to meet the current demand situation. When we see the supplies start to tighten up and we see demand kind of remaining consistent, we're going to see some upward support in prices.”
Again AFBF Economist Bernt Nelson.