Tighter US Beef Supply in 2022? – 10/13/2021

The USDA has forecast a two pound drop in the domestic per capita beef supply in 2022. Beef production is forecast to drop three percent next year compared to production in 2021. Net beef exports are forecast to decline 100 million pounds in 2022 as foreign buyers are squeezed out of the US beef market. 

The finished cattle futures contracts of 2022 are averaging roughly $4/cwt premium to  the October 2021 USDA forecast  published in the latest WAOB report. Live cattle futures have been under pressure this Autumn giving back some premium traders built into the market due to smaller cattle inventories. So far feedlot operators have been able to get sufficient feeder cattle supplies to operate at a relatively high level and market adequate fat cattle numbers. Beef supplies are likely to tighten as 2022 wears on due to limited feeder cattle supplies.