Cattle report data mostly neutral

USDA estimated the July 1 U.S. cattle herd at 98.8 million head, down 2 million head (2.0%) from year-ago, though that was 117,000 head more than the average pre-report estimate implied. The beef cow herd dropped 750,000 head (2.4%), while the milk cow inventory fell 50,000 head (0.5%). USDA estimated the 2022 calf crop at 34.6 million head, down 485,000 head (1.4%) from year-ago.

The smaller beef cow inventory and a 150,000-head (3.5%) decline in the number of heifers held back for breeding signals the contraction phase will continue. Previous cattle liquidation phases where we’ve seen the July herd drop 2.0 million head or more, the January population declined about another 1.5 million. That suggests a January 2023 population would total around 90.4 million head.

USDA revised its estimates of July 2021 other heifers (up 100,000 head), steers (up 100,000 head) and calves (up 300,000 head), which suggests the feeder cattle supply isn’t as tight as some believe.

USDA estimates the July 1 feedlot inventory at 11.340 million head, up 45,000 head (0.4%) from last year, only 39,000 head more than the average pre-report estimate implied. June placements declined 2.4% versus year-ago, though that was 2.6 percentage points higher than anticipated. Markets rose 2.0% versus June 2021.

Feedlots increased placements of lightweight (under 600 lbs.) and 6-weights by 4.3% and 3.8%, respectively. But placements of all other weight categories declined versus year-ago, with 7-weights down 1.3%, 8-weights down 8.7%, 9-weights down 10.3% and heavyweights down 5.6%. Kansas (down 50,000 head) and Nebraska (down 10,000 head) reduced placements, while Colorado and Texas each placed 10,000 head more cattle into feedlots last month.

Compared to last year, the number of steers in feedlots declined 80,000 head (1.1%), while heifers increased 125,000 head (2.9%).