Intense Pressure on Beef Industry Causes Dropping Livestock Numbers
The United States Department of Agriculture (USDA) is set to release the Cattle on Feed report on Friday, and expectations are high for a decrease in the number of cattle on feed for August compared to the previous year.
In the meantime, the market is showing signs of a downward trend. Feeder cattle futures are currently down $3.60 to $5.30 at midday, while live cattle futures for October 25 are at $231.125, a decrease of $2.325. The CME Feeder Cattle Index also followed suit, dropping 52 cents at $361.63 on September 15.
There were no sales in this morning's Fed Cattle Exchange online auction from Central Stockyards for 1,250 head offered, with bids at $230-235. A few Southern bids for live cattle are reported at $23 so far on Wednesday.
The decline in the market is also reflected in USDA Wholesale Boxed Beef prices, which are falling again. Choice boxes are down $4.89, and Select boxes are down $4.28 in the Wednesday AM report.
Looking further into the future, live cattle futures for December 25 are currently at $232.575, a decrease of $2.575. Similarly, Oct 25 Feeder Cattle are at $349.075, a decrease of $5.225, and Nov 25 Feeder Cattle are at $344.300, a decrease of $5.100.
Interestingly, the Chc/Sel spread, a key indicator in the cattle market, is at $18.84.
It's worth noting that cash trade for live cattle has not started this week, and no new information about this or the USDA's weekly cattle slaughter total or the comparison to the same week in 2024 is available.
USDA federally inspected cattle slaughter for Tuesday was estimated at 121,000 head, with the weekly total at 231,000 head, which is 7,000 head above last week but 16,107 head lower than the same week in 2024.
Investment analyst Austin Schroeder did not have positions in any of the securities mentioned in this article on the date of publication.
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