US – A marked improvement in pasture conditions is combining with continued strong calf prices, strong consumer demand and short beef supplies as an incentive for herd rebuilding.
This is according to Len Steiner and Dr Steve Meyer at the Chicago Mercantile Exchange who have noted a “truly remarkable” recovery in forage stocks, particularly in Texas.
Commenting on recent US Department of Agriculture Crop Progress and Hay Stock reports, they said 65 per cent of grazing land is now in “good or excellent” condition and that US hay stocks are 28 per cent higher than last year.
Pastures are in "great shape" and ahead of the ten year average.
“Long term drought conditions in the Southern Plains are now history,” they wrote in their daily livestock report earlier this week.
However, extreme drought remains across the western third of the US, with California remaining the worst hit. The 9 June US drought monitor showed parts of Nevada also under "exceptional drought".
Following a bullish cattle on feed report last week, they said the main challenge for beef prices remained the value of rival pork and chicken proteins.
Tight beef supplies are seeing slaughter running at 18.9 per cent below the previous year with year to date beef cow slaughter down nearly 17 per cent.
April placements in the feedlots below 1,000 head capacity were 4.6 per cent lower.
In his reaction to the Cattle on Feed Report last week, Professor Ron Plain, University of Missouri wrote: “The Livestock Marketing Information Center put the average returns for fed steers marketed in April at a negative $218 per head. April was the fifth month in a row with red ink.
“USDA said marketings of fed cattle from large feed yards during April totaled 1.639 million head, down 7.8 per cent compared to April 2014, and the lowest April since before USDA started this data series in 1996. The trade predicted April marketings would be down 7.6 per cent . Federally inspected steer and heifer slaughter was down 8.7 per cent in April.”
Fewer heifers are being placed into feedlots, a trend Messrs Steiner and Meyer expect to continue.
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