July 28

7/28 - In Friday’s monthly cattle report, USDA said feedlot inventories on July 1st were 11.12M head, down 1.6% from a year ago. New placements onto feedlots in June were down 7.9%. In May, the USDA (again) shut down the southern border to Mexican cattle imports due to an outbreak of “new world screwworm” disease. Mexico accounted for 4% of our 28M beef cows in 2024, and the import ban has (so far) left the U.S. short 800,000+ feeders (100k+/month since Nov 2024). In last week’s LDP Outlook, the USDA projected a 2.9% drop in beef output for 2025, followed by an additional 1.4% decline in 2026. USDA projects cattle prices to average $221.31/cwt in 2025 and $228.50 in 2026, up from a previous record-high $187.12/cwt in 2024. Cattle futures, at $226.47/cwt on Friday (7/25), are 19.9% above a year ago. However, forward futures contracts for 2026 are averaging $216.38, significantly below USDA projections.