Analysis for June 2024 Live Cattle Futures Prices – 11/29/2023
This month USDA forecast a two pound decline in the per capita 2024 US beef supply based on the production/usage data presented in the accompanying table. Of course the key number in the table is beef production which USDA expects to decline in 2024. USDA partially compensates for lower production by cutting US beef exports and ending stocks and increasing US beef imports.
| US Beef Supply/Usage (Million Pounds) | |||||
| Annual | 2021 | 2022 | 2023 | 2024 | Change |
| Beg Stock | 716 | 676 | 723 | 615 | |
| Production | 28,007 | 28,358 | 27,000 | 25,878 | -1,122 |
| Imports | 3,375 | 3,391 | 3,653 | 3,690 | 37 |
| Exports | 3,447 | 3,536 | 3,035 | 2,845 | -190 |
| End Stocks | 676 | 723 | 615 | 560 | -55 |
| Per Cap | 58.9 | 59.1 | 57.9 | 55.6 | -2.3 |
| USDA November 2023 Data | |||||
We have developed the accompanying scatter studies which set the winter/spring high and low for June live cattle futures prices as a function of the US per capita beef supply as estimated by USDA at mid-year. Recent historical price data has been adjusted to 2024 level using the implicit price deflator for US GDP.
The scatter study suggests a low of $160 and a winter/spring high of $190 per hundredweight. In the past 20 years the June live cattle contract has displayed an average winter/spring price range of $22 with a maximum range of $52 and a minimum range of $8 Cwt. USDA has forecast an average April/June price. basis deliverable live cattle in the Midwest, of $184 which is in line with forecasts derived from our scatter studies. We are inclined to read a little high on the scatter studies because of the need to reduce US beef exports and beef stocks as a cushion to reduced US beef output.