September 23

9/23 - Friday’s Cattle on Feed Report was bullish for prices. The USDA said new placements onto feedlots in Aug were 9.0% below a year ago, and that the Sept 1st feedlot inventory, at 11.0M head, was down 1.3%. In last week’s Livestock, Dairy & Poultry Outlook, the USDA highlighted the Aug 9 fire at a Tyson Foods plant in Holcomb, KS, and how capacity constraints will slow the pace of cattle slaughter through year’s end. The plant processed 6,000 head of cattle per day or 6.2% of the country’s total capacity. As a result, the USDA reduced its 2019 beef production forecast to just 0.3% above a year ago. Cattle prices, which had hit their high for the year at $129.95/cwt in Feb, bottomed at $94.20 on 9/9 before recovering to $99.35/cwt (9/20). Choice beef cutout prices jumped post-fire from $2.16/lb to $2.42 in Aug, but then declined seasonally in Sept to $2.17.