April 30 Weekly Update

4/30 – In April’s Cattle on Feed Report, the USDA said new placements onto feedlots in March were 8.3% below a year ago, but feedlots are still bulging with inventories at 7.4% above a year ago. Poor winter wheat grazing, due to drought in TX and OK, prompted higher than expected winter herd liquidation. Heifer (female) feedlot inventories began to increase sharply in mid-2017 and are now are 14.0% above a year ago. This indicates a shift in the cattle cycle away from herd expansion, as fewer breeders are held back from slaughter. But for now we have plenty of beef. U.S. Q1 beef output was 2.6% above a year ago, and Q2-Q3 production increases are forecast to be in the 6-7% range. The USDA is projecting Q2 cattle prices to average $116.00/cwt vs $132.76 in 2017; Q3 at $110.00/cwt vs $112.46 in 2017; and all of 2018 at $116.60 vs $121.52 last year.