Joelle Orem’s Post

I recently read this take to my dad about where the cattle market stands. He reminded me that every time we hit $2 fats, it’s often not long before the market takes a downturn. Consumers reach a choke point, and demand softens when beef prices get too high. History tells us that’s the cycle we should be used to; how much is unprecedented inflation affecting this dynamic? Future market cycles may play out a bit differently. As stated in the post, fewer replacement heifers are being retained than we’ve seen in past upcycles. According to recent reports by CattleFax, heifer placements in feedlots are unusually high, suggesting that many operators are prioritizing short-term returns over herd expansion. This doesn’t mean we won’t see a market correction, but it changes the picture. With fewer heifers held back, supply problems could surface faster, and even if the market trends downward, inventory recovery could lag—potentially inviting more imports. We may be stepping into a period of more volatile cycles. Dispersal sales have also seen a noticeable uptick over the past 18 months. USDA reports confirm that many of these cattle have entered feedlots, serving the current market rather than future breeding needs. This raises questions about whether we’re quietly reducing the cow-calf base without it being fully realized. The USDA’s projections suggest that a meaningful inventory rebuild may not occur until 2026 or even 2028. If that holds true, we could look at a longer stretch of constrained supply and sustained. I'm curious. The familiar market patterns we once understood might not be coming back. Just a few things I’m noticing. Curious to hear how others are reading the market. Are these trends reshaping your approach, or are you taking a wait-and-see stance?

Coming into 2024, the beef cow herd is at a 63-year low – the smallest beef cow inventory since 1961. This has pushed cattle prices to record levels through 2023 and 2024. And yet, there are no indications that any beef herd rebuilding is underway. The question of rebuilding the beef cow inventory is fundamental for cattle markets in the next few years. https://buff.ly/4dj3ebq

The USDA January 1, 2024 beef cowherd inventory was reported at 29.8 million head, the smallest US cowherd since 1962. As of October, heifers represent 40% of the cattle on feed; levels above 36-38% indicate beef herd expansion is not occurring. Analysts anticipate the January 1, 2025 beef cow inventory will be smaller again. Many in the beef industry interpreted the data to mean smaller weaned calf and cattle on feed inventories. Southern Great Plains fed cattle prices have been range bound in the $183-190/cwt range for most of fall 2024. Earlier in the year, many in the beef trade thought we’d see $200 fat cattle for the first time. Interestingly, the cattle on feed inventory has yet to reflect the smaller cow herd inventory. The October 25 cattle on feed report shows fed cattle inventory to be 11.6 million head. The next cattle on feed report will be released November 22; some analysts anticipate the November cattle on feed number will be very close to 12 million head, an inventory experienced less than a dozen times in the history of monthly records. Days on feed are 30-50 days longer than typical, carcass weights are record high (steers averaging ~950 lbs.), quality grades are high (>80% Ch and P nationally), and consumer demand remains strong. Given the generation interval and time required to grow a weaned heifer calf to a lactating female, it appears significant increases in feeder cattle numbers will not appear until 2028 or later. Cow-calf operations should plan for calf prices to remain strong, but also keep close watch on their unit cost of production. Photo by Dr. Rick Machen #kingranch #ranchmanagement #ranchmanager #krirm #ranching

📊 What does the rest of the year have in store for the UK beef market? We've just released our mid-year update, which looks out for the rest of 2024 and into 2025. Read the full report here: https://lnkd.in/e-78g8p8. Here are the key points: 🐂 Prime cattle slaughter is forecast to rise by 1% in 2024 overall to 2.06 million head. Cattle population data points to supply reductions in the final quarter of the year. Prime cattle slaughter in 2025 is forecast to reduce by a further 3% versus 2024. 🥩 Combined with a 1% reduction in cow slaughter, UK beef production for the full year of 2024 is forecast at 903,000 tonnes, largely stable (+0.3%) versus 2023. 🚢 Beef imports and exports are expected to remain above last year’s levels by 4% and 2%, respectively in 2024. 🐮 As at 1 December 2023, the UK breeding cow herd was 2% smaller than the year before. Both the dairy and suckler herds contracted, but the suckler herd drove the overall change. Subject to heifer slaughter levels, this points to longer-term domestic beef supply reductions.

The latest USDA WASDE report brings promising news for the cattle industry. With higher beef production driven by increased cattle slaughter and heavier weights, the market is seeing robust demand that is expected to continue into 2025. This upward trend in cattle prices reflects the sector's resilience and the growing global appetite for beef. Read the full article, here: https://lnkd.in/g9zkYnuG

Producing beef in the U.S. involves a complex chain of operations. Each stage is important to ensuring the quality, safety and availability of beef products for consumers across the country. 🧬 Seedstock and breeding: Specialized producers focused on improving the quality of a cattle herd. Breeders sell genetic material in the form of bulls, heifers, calves, and semen for AI (artificial insemination) to cow-calf producers. 🐂 Cow-Calf: Mature cows produce calves annually, usually raised on pasture. 🌱 Backgrounding/Stocker: Calves are prepared for feedlots by increasing their weight on grass diets. 🍞 Feedlots: Cattle are fed high-energy diets to reach market weight efficiently. 🍖 Packing Plants: Beef and byproducts are processed for different purposes. Learn more and visit the UC Davis CLEAR Center website for the full explainer written by Sebastian E. Mejia Turcios. 👇 https://lnkd.in/geJn88Bh

How much are you willing to pay for a steak? Beef prices continue to climb in the UK, as cattle populations contract despite strong consumer demand. This trend, exacerbated by falling subsidies and profitability challenges, highlights how heavily traditional animal agriculture depends on economic support to stay viable. As prices continue to rise, we may see a shift in consumer behaviour, potentially reducing future beef consumption. This could open the door for alternative protein sources to fill the growing gap in the market. The future of protein is evolving fast.

Dairy-beef (or beef from the dairy herd) is playing an ever-growing part in the UK beef market and supply chain. But how much does the GB dairy herd contribute to British beef production, and how is that changing? We explore the latest data to find out. Key points 📊 Just over half of all cattle slaughtered in GB abattoirs are born to the dairy herd. 📊 Registrations of dairy-beef calves have risen by 77% over the past 10 years, due to rising use of beef semen by dairy producers. 📊 Dairy-beef made up 35% of GB prime cattle (12-30 months) slaughter in 2023, up from 28% in 2019. 📊 Aberdeen Angus birth registrations to the dairy herd continue to grow. Wagyu registrations showed notable uplift in 2023.

Cattle Producers Advised to Manage Risk Ag Economist Recommends Ranchers Take Advantage of Low Feed Costs From an article in Progressive farmer by Jennifer Carrico Article excerpts: “The question on the minds of many beef producers is, "How soon will the herd rebuild?" In the opinion of economists like Dan Basse, that won't happen yet. Basse, an economist for AgResource Company, recently discussed his thoughts during the Feeding Quality Forum in Dodge City, Kansas. He said it's important to look at what is happening worldwide in agriculture to better understand what is happening locally. While those in the U.S. beef industry have been doing relatively well, there are some big struggles elsewhere. “…"For those of you in the cow-calf business, the times have never been better. The average estimate from universities and our calculations in terms of margins are now close to $600 per head," he said.” Link to article; https://lnkd.in/g6yRTupw