Steady On-Feed, Higher Cash, and Elevated Beef

Steady On-Feed, Higher Cash, and Elevated Beef

Haylie Shipp
Haylie Shipp
What is going on with cattle supplies? Recent reports show steady on-feed numbers even as cash cattle prices move up. Bernt Nelson, American Farm Bureau economist, explains that the on-feed numbers are a good indicator of what’s coming to market…

“Our cattle on feed numbers currently are not really bullish, but there are some things happening in there that can kind of lead people down another direction.”

Nelson says that despite higher cattle supplies, overall market conditions mean that cash prices aren’t necessarily going down…

“Overall, cattle on feed came in at 11. 6 million head. Now this is pretty close to where things were at this point last year. Placements were down around two percent. Marketings were up around two percent. There are a lot of fed cattle on the market right now. There's also good packing margin occurring right now. Typically when we think of higher supplies, we think of lower cash prices, but having those packer margins a little bit higher right now has allowed them to kind of bid for that.”

And if and when does it get to be too much for consumers…

“I don't think the overall choice in the beef cutout can go a whole lot higher before we start seeing some consumer demand shift away. You know, our consumers are getting tired. The inflation story has gone on for quite a while and these higher prices are exhausting.”

For more information, go to fb.org/marketintel.

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