2024 Cattle Markets - What does the Future Hold?
As we move toward spring, we are trying to secure six-weight stockers for grass this summer. Last season our average purchase cost was approximately $1,325 per head. This spring a similar sized calf is costing $1,925. A 31% increase year over year and dramatically exceeds the 5-year average steer price!
Like 2011-2012, drought is a serious factor. Ranchers are experiencing a shortage of grass and feed, and multiple operations are culling their herds. The USDA reported on Jan 31, 2024, stated that there are 28.2 million beef cows in the United States as of Jan 1, down 2% from last year. When adding in all cows and heifers the number is 37.6 million. Regardless, cattle inventories are very low, with some news outlets suggesting the lowest total since 1951, (USDA, United States cattle inventory down 2%).
As of right now, the shortage of animals is not impacting the markets or beef supplies. The most recent, Cattle of Feed Report shows cattle on feed up 2% as of Jan 1, 2024, and 3% up on Dec 1, 2023. In addition, an interesting note is 40% of those numbers are heifers or heifer calves. At the same time, cattle placements shows cattle placed in the feedlots down -4% as of Dec 1, 2024, and -2% down on Nov 1, 2023, (USDA, Cattle on Feed Report). If these placement trends continue, there will be less animals available for slaughter in early summer. There is a whole list of things that can impact the markets, including demand for beef, imports/exports, slaughter dress weights, and weather, etc. The reduction in inventory numbers is apparent. How the market responds in the 3-6 months will be interesting.