August 27 Weekly Update

8/27 – In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in July were up 7.9%, and that the Aug 1 feedlot inventory at 11.09M head was 4.6% above a year-ago and the highest Aug 1st inventory on record. Beef supplies are up, but not nearly as much as expected. In Jan, the USDA had forecast 27.28B pounds of beef for 2018, up 5.4% from 2017. That projection is now down to 27.09B pounds and a 3.5% increase. YTD heifer slaughter through July was 12.1% above a year ago, indicating that producers are liquidating breeding stock at a much higher pace. The cyclical growth in cattle herds has peaked and may be starting to decline. In ground beef, prices look to drop off post-Labor Day. Domestic 90% lean beef trimmings are $2.10/lb vs $2.31 a year ago and look to be $2.00 by Oct. Beef 50s fat trim are $.74 and should be $.60 by Oct.