Record-low July 1 cattle inventory

USDA estimated the U.S. cattle herd as of July 1 at 95.9 million head, down 2.7 million head (2.7%) from last year and 628,000 head less than the average pre-report estimate implied. That was a record low for the U.S. cattle herd dating back to the start of USDA’s data in 1990. Total cows and heifers calved stood at 38.8 million head, down 800,000 head (2.0%). All of that reduction was in beef cows, which fell to 29.4 million head. Dairy cows and heifers calved was unchanged at 9.4 million head. The 2023 calf crop is estimated at record low 33.8 million head, down 665,000 head (1.9%) from last year.

The smaller beef cow inventory along with a 100,000 head (2.4%) decline in beef replacement heifers signals the beef herd will continue to shrink.

Milk replacement heifers declined 100,000 head (2.7%) to 3.65 million head.

USDA estimated there were 13.1 million head of cattle in feedlots as of July 1, down 700,000 head (2.6%) from year-ago. With inventories of steers down 3.5%, other heifers down 5.2% and calves under 500 lbs. down 2.6%, feedlot inventories will continue to shrink.

Most of the categories were smaller than expected, which gives the report a bullish tone. But the underlying numbers are even more bullish and signal a run to new all-time highs in cattle futures will be coming.