An ag economist says the latest Cattle on Feed report from the USDA should be supportive to the cattle market.
Kenny Burdine is with the University of Kentucky. “It’s a simple story here,” he says. “Placements are lower than expected. Marketings are is as expected, but we marketed more than we placed. So, we brought on feed numbers down and significantly lower than we expected. It was bullish overall.”
He tells Brownfield this report will serve as a benchmark for the industry as live cattle imports from Mexico are set to resume today. “The next Cattle on Feed report, if nothing changes, we’ll have a little bit of that in those August placement levels,” he says. “We’ll have about a week of placements where that might show up.”
Burdine says there still are no signs of herd expansion, and the added volatility in the cattle market from the recent plant closures and the announcement from President Trump Friday that the U.S. will allow up to 300,000 metric tons of product for ground beef to be imported with no “out of quota” tariff for the next 90 days isn’t going to help.
“If it does work to lower beef price to some extent, you can’t make an argument that isn’t positive for catted prices,” he says. “So there’s the potential negative value impact as well. So no, this is at a minimum, this is disincentivizing expansion to some extent.”
The USDA had all Cattle on Feed up 1.8 percent, placements were down 11 percent and marketings were down a little more than 7 percent from last year.
