The 2021 calf yield is down 2.3% year-on-year. This is mainly due to drought pressure and high input costs for feed, fuel, fertilizer and labor.
Drought and input costs
Drought and high input costs impact cattle marketing and processing. Drought has had a major impact on rangelands and pastures this summer, especially on the western and southern plains. When grazing conditions deteriorate due to drought, heifers which are usually kept as breeding substitutes, are brought into the feedlot for final slaughter. High input costs are another impediment to farm profitability, prompting cattle producers to sell more cattle.
The rains of the last few days have improved grazing and rangeland conditions in some areas. Pasture and rangeland conditions improved slightly week to week for the week ending 25 September 2022, with 57% of acres in 48 states in fair to excellent condition, up from this last year. This equates to an improvement of about 3%. This should give some farmers and ranchers an incentive to keep calves as a replacement. However, it is important to note that grazing conditions take time to recover to pre-drought conditions.
Manufacturing
Beef production in August 2022 was 2.51 billion pounds, up 6% from the same period last year. Cattle slaughtered were 3.08 million, up 7% from August 2021. August 2021 and he is 6.2 above his five-year average. Slaughter of cattle (cows with one or more calves) was estimated at 6.8 million, up 6% from the previous year. The slaughter of cattle and heifers is especially important because the cow is involved in the future calf harvest. Together, cattle and heifers account for almost 51% of all cattle slaughtered from January to August 2022. Increased slaughter of cattle and heifers reduces calf yields and reduces future livestock supplies. Calves take longer to reach market weight (18-22 months).
Cold stores and food prices
Due to the high production of beef, the use of beef in refrigerated stores is increasing. In its Cold Storage Report for September, the USDA estimated beef in freezers rose 1% to a record high of £515.67 million in August. This is up 24% from the same point in 2021. The US Bureau of Labor Statistics announced on September 13th that he will release the August 2022 Consumer Price Index. The consumer price index for all groceries rose by 0.8 between July and August 2022, with all groceries prices up 11.4% over August 2021. The next few days to alleviate.
Exports
As of September 15, 2022, total beef export turnover was 682,600 tonnes, up 1.8% year-on-year. Beef exports to China, estimated at an estimated 35,800 tonnes, surged this week. U.S. beef exports to China totaled 116,000 tons, up 6.7% from the same period last year. Beef has been China’s largest meat import since 2021, with record amounts of beef entering China for weeks.
Exports are up slightly from last year, but may start to slow down. One reason is the strength of the US dollar. The US Federal Reserve raised interest rates by 75 basis points on September 1st and is indicating further increases towards the end of the year. The news pushed the US dollar higher against other foreign currencies such as the euro, Canadian dollar and Japanese yen. This could make it more expensive for countries to purchase beef and other products from the United States, prompting export customers to look elsewhere for better deals.
Feed
A total of 11.3 million cows and calves were being fed as of Sept. 1, according to the USDA’s September Cattle Feed Report, released Sept. 23, 2022. That’s only slightly more than last month, but it’s the second-highest month since the report began in 1996. Marketings are the biggest story of this month’s report, coming in at 2 million head, 6% above this time in 2021. Continued herd growth on fattening farms and the number of large numbers of bred cattle on the market contribute to the overall herd when USDA’s National Agricultural Statistics Service releases the biannual cattle inventory near the end of January 2023.
Conclusion
August 2022 was a record month for beef. Record monthly production was driven by an increase in the pace of slaughter, resulting in record amounts of beef in cold storage. The August 2022 slaughter occurred at 7am, the same he did in 2021. The USDA predicts that the 2022 cattle slaughter will be at 1:08 PM in 2021. His first three quarters of 2023. Slaughter of cattle and heifers continues to increase due to drought stress and high input costs such as feed and fertilizer. This continued growth of cows placed on processed feed will result in tighter herds in the years to come.
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