Author: David Anderson

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

Recent SAT articles on the cattle market have mentioned the surge in fed cattle dressed weights as an important factor in boosting fed beef production in 2024.  This article puts 2024’s dressed weights into some historical context and looks at some factors that will influence dressed weights this year. Since 1964, federally inspected steer dressed weights have increased from 662 pounds to 931 pounds in 2024.  That is a 41 percent increase over that time period.  A simple average of percentage change per year equals 0.68 percent, or 4.75 pounds per year increase in steer dressed weights.

The chart of steer dressed weights illustrates this trend in increasing weights.  It also illustrates that this growth is not a straight line of increasing weights every year.  There are many examples of year-to-year declining steer weights.  Many of these years with large weight changes correspond to years with interesting challenges.  For example, steer dressed weights declined 28 pounds from 1974 to 1975 and rebounded 23 pounds from 1975 to 1976.  Other examples might be 2001-2003 or 2014-2016. The 23 pound increase in annual average dressed weight from 2023 to 2024 is significant, but is not the largest year-over-year increase.  Even larger annual increases were recorded in 1985, 1994, 1998, 2002, and 2020.  

Large annual increases are often followed by declining weights.  Could weights decline in 2025?  There are several factors that could lead to a decline in weights including winter storms that pull down weights.  As cattle numbers further tighten, the need to run packing plants at efficient levels could pull cattle out of feedlots faster and lighter.  However, good beef demand will create an incentive to try to produce more beef per head pushing weights higher to offset fewer cattle.  Continued lower corn prices lowers the cost of gain which is an incentive to feed to heavier weights.  

We might consider the effect of increasing weights and the implied increase in production per cow on beef cow inventory in the future.  Heavier weights implies fewer beef cows are needed to maintain level beef production.  The 23-pound increase in dressed weight multiplied by the approximately 15.1 million head of federally inspected steers slaughtered in 2024 is the equivalent of about 371 thousand steers.  Put another way, increased dressed weights offset the need for 371,000 steers suggesting the need for fewer cows.  This is a rough example that could use some refinement, but the point remains that increased weights likely impact the cow herd expansion.

This article used only steer dressed weights.  Heifer dressed weights have increased at an even faster rate and cow weights have increased, too.  Heavier weights are not limited to cattle as hog and poultry weights have increased over time but, those weights are for another article.  There is little reason to expect weights to stop their long-term growth.  But the data shows it’s a bumpy ride to heavier weights with fits and starts along the way.

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Anderson, David, and Josh Maples. “Fed Cattle Weights and Herd Expansion.” Southern Ag Today 5(3.2). January 14, 2025. Permalink