Drought conditions across the U.S. continue to have an impact on the cattle markets, according to recently published data.
Farm Bureau economists say the most recent Cattle on Feed report was bullish with total cattle on feed down a percent from last year. Bert Nelson points out that states impacted by drought had lower placement numbers, and that could mean lower cattle supplies in the future.
“This is likely due to some tighter calf supplies along with higher feed and input costs amplified by the drought conditions. We’ve seen marketings for fed cattle totaling 1.86 million head for September, this is four percent above this time in 2021. Now, when we really see marketing high and placements become lower over a longer drawn-out period of time, this really signals that lower cattle supplies are in the future,” said Nelson.
USDA numbers show beef slaughter is up, which Nelson says shows that packers need to get cattle in to meet current demand. He says when supplies tighten up and demand remains consistent, we should see prices follow suit.
The National Cattlemen’s Beef Association (NCBA) and Public Lands Council (PLC) are praising the passage of a bill to delist gray wolves as an endangered species by the U.S. House last week.
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Tight feeder supplies and lower placements indicate continued support for the cattle market, with regional impacts heightened in Texas by reduced feeder imports.
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Mexico plans to release 202,000 acre-feet of water into the Rio Grande, offering temporary relief to South Texas farmers as Congress advances the PERMIT Act.
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Analysts say that while low-income households are facing financial pressures, other middle- and higher-income consumers are helping fill the gap for retail beef demand.
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