Author: David Anderson

Friday, May 23^rd, brings us the next USDA Cattle on Feed report.  Most analysts anticipate April’s feedlot marketings to be more than 3 percent smaller than last year, with the same number of working days in April 2025 compared to April 2024.  Fed steer and heifer slaughter has declined dramatically, more than 5 percent from year-ago levels, over the last six weeks.  

Saturday slaughter is often used as a measure of capacity utilization.  Fewer animals processed on Saturdays indicates declining capacity utilization or over capacity.  Declining cattle numbers mean that fewer may be processed on other days of the week.  Daily slaughter should suggest some thoughts about the ability of current packing plants to remain open in future months as cattle numbers contract.

Over the last 6 weeks, steer and heifer slaughter has averaged 58,671 head on Fridays, down from 85,958 head during the first quarter of the year.  Other days of the week have remained relatively close to the average during the first quarter of the year and compared to all of 2024.  It appears that overall, packers are dealing with fewer cattle numbers by maintaining capacity on Monday through Thursday, even increasing head per day in the middle of the week, while sharply cutting back on Friday.  

The decline in fed steer and heifer slaughter, even combined with historically heavy dressed weights, has certainly supported fed cattle prices to new record highs in recent weeks.  Grilling season beef demand has pulled the market even higher.  Feeder cattle and calf prices have gone along for the ride.  The cattle on feed report will provide another indication of how tight fed cattle supplies will be in the next few months.  Fewer cattle on feed will continue the trend of reduced Friday slaughter and may lead to reductions on other days, as well.  

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Anderson, David. “Working Less on Friday!” Southern Ag Today 5(21.2). May 20, 2025. Permalink

The U.S. closed the border to Mexican cattle again on May 11, 2025.  This closure is the next round following the closure in late November 2024 and reopening in February 2025.  The closure was prompted by continued expansion in screwworm cases in Southern Mexico.  Additionally, new cases were reported as far North (or West as you read the map) as the states of Veracruz, Oaxaca, and Tabasco.  The narrowest part of Mexico, geographically the Isthmus of Tehuantepec, has been considered an important line of defense because this is where the country begins to widen. The widening area leads to more land area to treat, making effective control that much more difficult.

Since the border was reopened to cattle in February, feeder cattle imports rebounded to about 20,000 head per week.  Imports have remained below 2024 and the previous five-year average.  Additional inspection and quarantine regulations likely slowed the pace of imports, as well as not all ports of entry operating for cattle.  Only 4 of the 11 ports of entry for cattle have been operating.  For example, of the six Texas ports of entry, only Presidio had cattle crossing since the border was reopened.  Santa Teresa, New Mexico is the largest cattle port of entry, and it had been operating since the week of February 8, 2025.

Feeder cattle imports from Mexico peak seasonally in the Spring and Fall.  Over the 10 years from 2015-2024, feeder cattle imports from Mexico averaged 5.2 percent of feedlot placements into feedlots with over 1,000 head capacity.  Presumably, most of those cattle are placed into feedlots in Texas and the Southwest.  Annual feeder cattle from Mexico was the equivalent of  18.0 percent of annual feedlot placements in Texas, Oklahoma, Arizona, and California over the 2015-2024 period.  

The loss of feeder cattle imports will further tighten feeder cattle supplies.  Already record high calf prices will likely see some more upward pressure.  The loss of these cattle will further pressure feedlots in the Southwest as well. 

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Anderson, David. “Screwworms, Part II.” Southern Ag Today 5(20.2). May 13, 2025. Permalink

The cattle market has experienced a lot of volatility in recent weeks, especially in the futures market, due to tariff announcements and recession fears.  But, prices have rebounded since the first tariff announcements due to fundamental market conditions.  Those fundamental conditions include tight supplies of cattle, relatively low feed prices, and grilling season.

Live fed steer prices weighted across all grades averaged $207.70 per cwt the week of April 13^th, following the flood of tariff announcements.  Prices quickly rebounded to over $212 per cwt. in the ensuing weeks after averaging over $211 per cwt for the three weeks prior to the tariff announcements. Calf and feeder cattle markets across the South experienced price declines during that same week.  Georgia auction 500-600 pound steers dropped about $7 per cwt from early April to the week of April 12^th before rebounding to $368 per cwt.  Mississippi auctions experienced a more dramatic decline, dropping $13 per cwt before recapturing about half of the decline.  

Beef production remains relatively close to last year.  From January through April 26, beef production is equal to last year.  But over the last month production is down 1.3 percent compared to last year.  Using the daily slaughter data, fed steer and heifer slaughter is down 2.8 percent in April compared to last April.  Heavier weights are continuing to keep beef production high relative to what steer and heifer slaughter would suggest. This is further showcased by the growth in cattle grading prime relative to select. Since March 15, there has been a higher percentage of fed cattle grading prime (about 12 percent) than there has select (about 11.3 percent). 

One thing worth watching, that we will monitor in coming SAT’s, is weekly U.S. exports of beef to China.  Tariffs appear to have severely damaged exports in the early reported weekly export data.  For the week of April 17^th,the U.S. exported only 186 metric tons of beef to China.  That is the smallest weekly exports since March 2020 at the beginning of Covid.  Exports for the week of April 10th totaled 1,431 metric tons.  China has been our 3^rdlargest export market for beef, following Japan and South Korea.  Tariffs appear to have impacted U.S. pork exports similarly. So far, the other fundamentals have overshadowed the impact of reduced trade to China, but that might not be the case for the rest of the year.   

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Anderson, David. “Volatility and Fundamentals.” Southern Ag Today 5(18.2). April 29, 2025. Permalink

The headline numbers of feedlot marketings, placements, and total cattle on feed were not a lot different from expectations.  Feedlot marketings in March were just over 1 percent larger than the previous March.  With the same number of working days in the month as last year, daily average marketings slightly outpaced a year ago.  Placements were 5.1 percent larger than last year.  Larger placements were not a surprise due to an expectation that placements were delayed a bit from February and, normal, seasonally larger March placements from wheat and other small grain pastures.  Larger placements and marketings left the total number of cattle on feed 1.6 percent fewer than last year.  

Placements for the year are worth another look.  For the first 3 months of the year, placements are 4 percent, or 216,000 head, fewer than last year.  But, feeder cattle imports from Mexico through March are down 227,000 head compared to a year ago.  Remember that there were no imports through January and much slower imports in February due to screwworm regulations.  Taken together, the decline in imports from Mexico is larger than the total decline in placements so far this year.  The impact of fewer feeders from Mexico likely shows up in Texas’ placements, which are down 13.1 percent for the year.

To save the best for last, the most interesting part of this report was the quarterly estimate of the number of heifers in feedlots on April 1.  Heifers on feed were down 4 percent, or 180,000 head, compared to April 2024. The 4.38 million heifers on feed were the fewest since April 2020 and before that, April 2018.  Since the first of the year, 77,000 fewer spayed heifers were imported from Mexico, so they make up a portion of that decline.  While the headline of fewer heifers on feed may raise eyebrows, the number remains large.  There have been more than 4 million heifers on feed for 30 consecutive quarters, and they make up 37.6 percent of the cattle on feed.  We’ll have to wait for larger and consecutive declines in heifers on feed as evidence of any heifer retention for herd rebuilding.

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Anderson, David, and Josh Maples. “Fewer Heifers in Feedlots.” Southern Ag Today 5(17.2). April 22, 2025. Permalink

Spring is here and not only are calf and fed cattle prices record high, but cull cow prices have joined the action.  Cow prices typically increase from late in the previous year until about May-June.  Both supply and demand factors contribute to higher cull cow prices in the Spring.  On the supply side, total cow slaughter tends to decline until the middle of the year.  On the demand side grilling season is starting and that means more demand for ground beef.  

Cull cow prices in the Southern Plains have increased from $121 to $145 per cwt since the first of the year.  Auction prices a year ago in those markets averaged $134 per cwt.  On the meat side, the cow-beef cutout climbed to $297 per cwt.  At the same time, wholesale 90 percent lean boneless beef hit $382 per cwt.  Pretty clearly tight supplies and Spring grilling season demands are sending prices higher.  

On the supply side, cow slaughter, typically, slowly declines until mid-year.  That is about where we are through March, maybe a small downward trend in weekly average slaughter.  While the pattern of slaughter is pretty normal, the numbers going to slaughter are sharply lower.  Through mid-March, beef and dairy cow slaughter are down 20 percent and 6.6 percent, respectively.  The decline amounts to 16,000 fewer total cows going to packers per week than last year. 

It’s worth noting that beef cow and dairy cow slaughter exhibit different seasonality throughout the year.  Beef cow slaughter tends to decline in Spring, have a mid-year increase, then a peak late in the year.  Dairy cow culling peaks early then declines to seasonal lows in mid-year.  Production systems across the country largely explain these seasonal peaks and valleys.

While cow slaughter is lower than last year reducing lean beef supplies, imports are adding lean beef trimming supplies.  Beef imports in January totaled a monthly record of 608 million pounds.  Imports from Brazil were almost a third of total beef imports for the month at 198 million pounds.  Brazilian beef imports normally decline after January so total beef imports should decline over the next few months.  

There is more room for cow prices to increase further over the next couple of months.  Grilling season is just getting started for a lot of the country.  Fewer cows going to market will keep prices above a year ago the rest of the year.  Higher fed cattle prices should help support cull cow prices.  

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Anderson, David. “Record Cow Prices! It’s Not April Fools!” Southern Ag Today 5(14.2). April 1, 2025. Permalink