Cattle Market Update

There were 11.8 million head of cattle on feed February first, on the high side of recent history.

The USDA has forecast a 2% year over year increase in U.S. beef production in 2020. Aggregating USDA’s production, trade and population data results in 21.3 pound per person domestic beef supply for the second quarter of 2020.  The accompanying scatter study uses the per capita beef supply as a barometer and the average price of steers at Omaha during the second quarter as the dependent variable. 

The point representing 2020 is not far from the regression line so it would take a major change in the beef production outlook to generate a significant bear or bull market this spring.