Winter weather and fewer placements are accelerating the squeeze on feedlot supplies, even as beef demand continues to support high slaughter levels, according to The AG Center.
The latest all-cattle inventory report showed 15% more cattle on grain fields this winter compared with a year earlier, a figure that surprised many in the industry. Recent placement data, however, appears to contradict that increase. While weather-related disruptions to January placements were widely expected, February placements are now also falling well below last year’s levels.
Beef demand continues to support slaughter levels in the range of 530,000–540,000 head, which aligns with current feedlot supplies. As the year progresses, however, those supplies are expected to tighten further as the pipeline of fed cattle continues to shrink, The AG Center noted.
Cash trade in the South ranged from US$/cwt 242 to mostly US$/cwt 245 last week. In the North, the price range was wider, with live cattle trading from US$/cwt 238–245 late in the week, while limited dressed trade was reported at US$/cwt 378.
Severe winter conditions have disrupted cattle flows into feedlots at a time when placements were already declining. The resulting short supplies have intensified margin pressure on feedlot operators and raised the risk of higher beef prices for consumers in supermarkets and restaurants. Downsizing across the sector is proving painful, as the country remains equipped with feeding and processing capacity designed for a larger national herd—one that may never return to pre-pandemic levels, said The AG Center.
