US Cattle on Feed Inventory Down

USDA reported the number of cattle in US feedlots January 1  totaled 11.7 million head or 3% fewer than at the same time a year ago. Net feeder cattle placements declined  8% year over year in December 2022 while finished cattle sales last month declined 6% compared to marketings in December 2021. We project fat cattle marketings in the first half of 2023 will decline 5% compared to feedlot sales in the first half of 2022.

April live cattle are projected to trade between $155 and $175 assuming USDA’s current beef production forecast and normal economic growth during the forecast period. An economic recession similar to that of 2008-2009 could drop the projected low for April cattle by $10/Cwt. The need to shift the US cattle inventory cycle to an up phase is likely to be the major supporting force for booth live and feeder cattle futures prices in 2023.   

The year 2009 illustrates the possible impact of economic recession on finished cattle values.