NASHVILLE, TENN. (RFD NEWS) — U.S. cattle placements fell much more sharply than analysts expected in August, strengthening the signal of tighter fed-cattle supplies ahead, while a new USDA inspection agreement could expand processing options for livestock producers.
USDA reported August cattle placements at 1.617 million head, down 9 percent from last year and the lowest August total since the series began in 1996.
Pre-report estimates averaged 1.723 million head, down 3.2 percent, with expectations ranging from 1.6 percent to 6.1 percent lower. The actual 9 percent decline came well below even the lowest analyst projection.
Cattle on feed totaled 11.163 million head September 1, up 1 percent from last year. Analysts had expected 11.279 million head, or 1.8 percent higher.
August marketings totaled 1.519 million head, down 3 percent, versus expectations of a 3.9 percent decline. USDA also reported August marketings were the lowest for the month since 1996.
Placements fell 14 percent in Nebraska, 7 percent in Kansas and 6 percent in Texas, reinforcing concerns about cattle availability several months ahead.
Meanwhile, New Mexico is joining the USDA State Meat and Poultry Inspection Program, a move that could expand inspection options and market access for small and very small processors.
USDA and the New Mexico State Livestock Board finalized an agreement allowing the state to join the program. New Mexico is now the 31st state with an approved State MPI program.
State inspection programs must meet federal food safety standards, but state-inspected products are generally limited to in-state sales. Processors can gain access to interstate markets through the Cooperative Interstate Shipment program if their state participates and the establishment qualifies.
USDA has also announced up to $50 million through its new Stand-Up Program to help states join or expand state meat inspection programs and the Cooperative Interstate Shipment program.
The National Cattlemen’s Beef Association (NCBA) says only 11 of the 30 states eligible for the CIS program currently participate. The group says regulatory and compliance costs, along with persistent labor challenges, have created barriers to participation.
NCBA says additional funding is welcome, but structural changes will also be needed to encourage more states and processors to participate.
For livestock producers, expanding state inspection programs could provide more local processing options, while participation in CIS can give qualifying state-inspected processors a path to interstate sales.
NCBA Responds to Stand-Up Program Announcement:
“Yesterday, Secretary Brooke Rollins announced the creation of U.S. Department of Agriculture’s (USDA) Stand-Up Program during the National Association of State Departments of Agriculture’s (NASDA) Annual Meeting. Secretary Rollins shared that the program would provide up to $50 million to help states join or expand federal-state meat inspection programs through the Cooperative Interstate Shipping Program (CIS).
“Currently, 30 states participate under the Meat and Poultry Inspection Program (MPI) program, but only 11 of the 30 eligible states participate in the CIS program. High regulatory and compliance costs have been barriers for further state participation. Additionally, persistent labor challenges in the processing sector continue to create challenges and uncertainty around efforts to diversify processing options for producers around the country. While the announcement includes funding, structural changes need to happen within the program to help support additional states participation.
“While additional resources are certainly welcome and needed, farmers and ranchers need USDA to make progress on the real and persistent hurdles state meat inspection programs face. NCBA looks forward to further details on this new effort in the days to come.”
