Cattle on Feed & Price Outlook for August live Cattle
US feedlot feeder cattle placements and finished cattle sales both dropped sharply last month. Expensive feeder cattle replacements and high feed costs drove down placements and marketings last month. We project finished cattle marketings will decline 5% this summer and autumn.
August live cattle are trading well below the cash market and moderately under the projected high based on USDA’s US beef supply/usage forecast published early this month. USDA has increased the US beef production estimate this spring which has knocked more than $10/cwt off of our August live cattle high projection. The cash cattle market price displayed a strong negative seasonal tendency from mid May into the late summer period in the years from 1973 through 2022 thus the discount the market has assigned to the August live cattle contract.
The USDA has forecast the average third quarter live cattle price at $164/Cwt. compared to $143 in the same period a year ago. August Live Cattle could make highs near $170. Expect a major price break in the early or mid summer given the history of the cash fat cattle market.
| Forecast June – August live $/Cwt. | |||
| High | Low | ||
| Forecast | $168 | $157 | |
| standard deviation | $9 | $9 | |
| % Rsq | 89% | 88% | |
| Assumptions for 2023 August Live Price Range Forecast | |||
| 2022 | 2023 | % Change | |
| Beef Production | 7,146 | 6755 | -5% |
| Beef Exports | 943 | 955 | 1% |
| US GDP | $25,663 | $27,500 | 7% |
| Beef Production & Exports in Million Pounds, GDP in Billion $ SAAR | |||
| Data for third calendar quarter 2023 | |||
The accompanying charts and table summarize the data used in our analysis.
Note USDA expects a very sharp drop in 2024 US beef production which will be a supporting force in the cattle market.