A trio of eagerly anticipated USDA reports on cattle inventory, cattle on feed, and cold storage are unlikely to move markets in a big way early next week, doing little to offset downward pressure tied to negative packer margins and concerns about consumer affordability while also offering no sign beef supplies are likely to grow over the next year.
Cattle futures saw some short-covering and positioning ahead Friday’s reports, though that strength faded later in the session with October live cattle and September feeder cattle contracts closing near mid-range. Traders will start next week influenced by a fresh update on the supply fundamentals in cattle following today’s reports. We provide a full breakdown of USDA’s data dump below.
Cattle Inventory
In its semi-annual cattle inventory report, USDA estimated all cattle and calves in the U.S. herd totaled 94.2 million. That figure is up a marginal 200,000 head from the record low notched last July, and marks the first year-over-year increase in July since 2017-18. The number of cows as a total was unchanged at 38.1 million head. Further details, however, show beef cows declined 200,000 head while milk cows increased 200,000, highlighting the role that beef on dairy genetics are playing to keep beef supplies steady amid a still historically tight U.S. cattle herd.
Heifers saw a 100,000 head increase from last July to 14.7 million. Heifers for beef cow replacement and milk cow replacement increased 100,000 to 3.8 million and 3.6 million respectively, while “other” heifers fell by 100,000 to 7.3 million.
Steers increased 100,000 to 13.9 million head, while bulls were unchanged from last year at 1.9 million.
The number of calves in the U.S. is unchanged from last year and is estimated at 25.6 million head. The calf crop came in at 32.5 million head, down slightly from last year’s 32.995 million and a new record low.
Cattle on Feed
As of June 1, USDA estimated cattle and calves on feed for slaughter and feedlots with a capacity of 1,000 or more head totaled 11.4 million head on July 1, 2% above the same date last year. The figure was below the average estimate of a 2.3% rise seen in a Reuters survey of analysts.
Of those cattle on feed, 4.3 million are heifers, and 7.1 million are steers. That puts the heifer-steer ratio at 37.4%, up a meager 0.1% from last quarter, but down 0.7% from the previous year.
Placements totaled 1.399 million head in June, 97% of a year ago. Net placements were 1.35 million head. During June, placements of cattle and calves weighing less than 600 pounds were 325,000 head, 600-699 pounds were 225,000 head, 700-799 pounds were 300,000 head, 800-899 pounds were 309,000 head, 900-999 pounds were 160,000 head, and 1,000 pounds and greater were 80,000 head. Analysts had looked for placements at 97.7% of a year ago.
Marketings of fed cattle in June totaled 1.66 million head, also 97% of a year ago, and the lowest for June since the data series began in 1996. Analysts, on average, expected marketings at 97.2% of a year ago.
Other disappearance totaled 50,000 head during June, 6% below 2025.
Herd rebuilding is likely, but still proceeding slow
The reports delivered by USDA today indicate that herd rebuilding is likely now in the early stages as the first year-over-year increase in eight years occurred. Coupled with that, heifers in feedlots comprise a smaller percentage of cattle on feed than at this time last year. While the size of the U.S. herd did notch an increase, questions around how fast supply can pick back up still remain. Heifers saw only a marginal increase, and a new record low calf crop serves as a reminder that the limitations around gestation cycles will limit ranchers’ ability to re-grow the herd and match the demand for beef.
In the shorter run, the cattle on feed report can be regarded as mostly price neutral. Analyst expectations were nearly right in line with USDA’s report, and no major surprises were received. Cold storage data also showed beef stocks down 3% from month-ago and year-ago levels, indicating consumer demand was likely slightly firmer than was seen the month prior.