Author: David Anderson

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

While some of us might be tired of reading (and writing) about eggs, there is some new data out that sheds some more light on the pace of production recovery.  USDA released its Chickens and Eggs report on Friday, March 21^st.  For eggs, two of the most important numbers in the report are: the number of table egg layers and the number of pullets on March 1^st.  These numbers tell us where we are currently in short term supplies and where we are headed in flock rebuilding.

The report indicated that there were 285.1 million table egg layers on March 1.  That was down 8.7 million from February 1 and down 28.3 million from last March.  It was the fewest table egg layers for any month since October 2015 and the fewest for March 1 since 2011.  HPAI continued in full swing during February, far outstripping the ability to replace lost birds.  

The number of pullets, young hens heading to egg production, of all types was up 6.8 million or 5.5 percent over March of 2024.  About 500,000 more were available than in February.  While pullet production facilities have not been immune from HPAI occurrences, their numbers are growing as the industry responds to high prices and short supplies.  Beyond the increased number of pullets, more eggs in incubators and eggs per 100 layers running ahead of a year ago indicate some more growing supplies.  

On the price side of eggs, many have noted in the last couple of weeks falling wholesale egg prices.  For the week of March 22^nd USDA-AMS reported egg prices delivered to warehouses of $3.96 per dozen.  That is down from the peak of $8.51 per dozen for the first week of March.  Egg prices tend to be highly volatile and this data highlights that.  Based on data from the chickens and eggs report, it does not appear that growing supplies are driving lower prices.  The most likely factor is demand economics.  For almost all goods, people buy fewer quantities of an item when its price goes up.  It appears that consumers are reacting to record high prices by purchasing fewer eggs which results in lower prices. 

The bottom line is that while there are fewer table egg layers currently, increased egg production appears to the on the way.  While egg prices are volatile, increased supplies, given a respite from HPAI caused chicken losses, will keep prices trending lower.

Anderson, David. “Chickens Before Eggs.” Southern Ag Today 5(13.2). March 25, 2025. Permalink

This Friday brings the next USDA Cattle on Feed (COF) report.  The March 21^st report will include data for February and the number on feed as of March 1^st.  This report comes amid cattle market price volatility and declining fed cattle prices throughout February.

There are three big numbers in the COF report: marketings, placements, and COF.  Last year was leap year so there was one less working day in February 2025 compared to last year.  Marketings should be about 8 percent smaller than last year.  Some of that comes from one less day in the month but, it is also indicative of smaller slaughter rates in February.  Placements are expected to be more than 10 percent smaller than last year.  One factor is that feeder cattle imported from Mexico only just began to trickle in during the first week of the month.  Sharply fewer cattle were reported in the CME feeder cattle index compared to a year ago.  Fewer feeder cattle available should be taking its toll on placements.  Any slowdown in heifer placements will further cut numbers.  Finally, feedlot placements in February 2024 were very large so, normally, smaller February placements will look like a big percentage change from a year ago.  That leaves the number of cattle in feedlots more than 1 percent smaller than last year.  Some sharp reductions in feedlot supplies have to come sooner or later given the cow herd.  This report may provide some evidence of supply contractions.

From January 30^th to March 6^th the 5-market fed cattle weighted average steer price declined from $210.10 to $195.00 per cwt.  (the 5-market average price was back over $200 per cwt at the time of this writing).  Falling fed cattle prices certainly contributed to lower feeder prices during February.  Falling fed cattle cash prices and futures prices may have cut some placements too.  February and early March saw swings of about $50 per cwt., down and back up, in 400-500 pounds steer prices.  The weekly average Choice boxed beef cutout declined about $15 per cwt over the same time period.  Fed cattle weights continue to be heavier than last year, supporting beef production even though feedlot marketings are fewer than last year. 

On balance, it’s going to be an interesting report if the number of cattle on feed declines close to 2 percent.  The tighter supplies will provide more support for higher prices but, also some more opportunity for price volatility.  

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Anderson, David. “COF Report Amid Declining Prices.” Southern Ag Today 5(12.2). March 18, 2025. Permalink

USDA will release the February Cattle on Feed report on Friday, February 21^st.  It’s following closely on the heels of the cattle inventory report released at the end of January.  There are several interesting things to look for in this report, including overall placements, the impact of border restrictions on placements in Texas, and the number of cattle in feedlots.

In a sense, marketings and placements are related.  We can think of cattle leaving the feedlot for a packer (marketings), making way for new cattle to enter (placements).  Marketings are estimated to be up about 2.5 percent in January compared to last January.  Given the same number of working days as a year ago, daily average marketings were faster than last year.  

In my pre-report estimates, I expect placements to be about the same as a year ago.  Placements equal to last January would imply a fairly small number of feeder cattle placed compared to marketings.  This estimate balances larger numbers of feeder cattle in the CME feeder cattle index and no cattle entering the U.S. from Mexico in January.  The U.S. imported 107,000 fewer feeder cattle in January 2025.  Feeder cattle imports only resumed in the second week of February, at very low levels compared to last year.  The number of lightweight placements in Texas will provide some good insight into the impact of the ban on placements.  Texas placements in December were down 23 percent, with much of that decline coming in the lightest weight categories.

The combination of larger marketings and no change in placements would pull down the number of cattle on feed on February 1^st to 98.8 percent of the prior February.  Sooner or later, fed cattle supplies will begin to decline dramatically due to fewer calves and herd rebuilding.  The market likely can’t continue to rob Peter to pay Paul by pulling animals ahead and placing heifers, and when that ends, the number of cattle on feed will decline dramatically.  That will lead to another increase in calf and feeder cattle prices this year.

Two other interesting pieces of information will be included in this report.  The February report includes an estimate of total feedlot capacity in the U.S.  We often talk about packer capacity but rarely feedlot capacity.  Feedlot capacity has not been a limiting factor in the market.  This report will also include data on the number of fed cattle marketings and cattle on feed by size of feedlot.  That data provides some insight on concentration in the feedlot sector.  

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Anderson, David. “Fewer Cattle on Feed?” Southern Ag Today 5(8.2). February 18, 2025. Permalink

Three weeks into the new year and the cattle market continues to set new record highs.  The 5-market average fed cattle price hit $203 on Friday, January 17^th, creeping higher from the $202 per cwt average of the week before.  This current price rally is continuing the rising price trend that began late in 2024.  Historically, it would not be unusual for prices to pull back in February before climbing even higher to a Spring rally.  

Rising prices are not limited to the fed cattle market.  Calf and feeder cattle prices have shared in the rally.  Feeder cattle, 700-800 pound steers reported by Georgia auctions hit $251 per cwt last week, $42 per cwt higher than this time last year.  In the Southern Plains, cattle of that same weight category hit $279 per cwt.  The weekly average Choice beef cutout increased to $329.03 per cwt, just slightly below the mid-2024 peak of $329.96.  Positive beef and cattle demand is contributing to higher prices.  Some tighter supplies of feeder cattle and calves due to the restriction on calves from Mexico, feedlot placements earlier in the year, and maybe some withholding of heifers from auctions are boosting feeder prices.  It appears that the resumption of feeder cattle imports from Mexico are going to be further delayed as new facilities and inspection procedures remain in the works. 

USDA’s January Cattle on Feed report is scheduled to be released on Friday of this week.  The pre-report estimates indicate feedlot marketings about 1.4 percent higher than December of the year before.  Analysts’ expectations for feedlot placements range from above to below a year ago.  The combination of placements and marketings leads to January 1 feedlot numbers slightly below those of a year ago.  This report will have the quarterly breakdown of steers and heifers in feedlots which will add another data point to expectations of the start of cowherd expansion. 

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Anderson, David. “New Record High Prices.” Southern Ag Today 5(4.2). January 21, 2025. Permalink