2021 Beef Production Forecast Remains Optimistic Despite February’s Severe Weather Disruption
The U.S. Department of Agriculture Economic Research Service is revising its expectations for 2021 beef slaughter totals due to higher-than-expected first-half cow slaughter numbers. The Economic Research Service increased the forecast by 40 million pounds, bringing the expected 2021 total to 27.6 billion pounds. Weekly cattle slaughter numbers also suggest there will be a temporal shift in the expected steer and heifer marketings due to severe weather events in mid-February that disrupted packing plant operations, processing facilities, and the delivery of cattle to plants. The 2021 live steer price forecast by the Economic Research Service remained unchanged from last month at $115 per hundredweight.
Shifts In Marketing
The USDA’s reports of Actual Slaughter Under Federal Inspection for the weeks ending February 13 and 20 indicate cattle slaughter dropped by over 2% and 12%, respectively, below the same weeks a year ago. And while the packing industry responded with two weeks of the largest slaughter volumes since the first week of December 2020, the short-term drop in cattle slaughter is likely to shift expected steer and heifer marketings out from the first quarter to the second quarter. That notwithstanding, the marketing shift in fed cattle slaughtered, along with higher expected cow slaughter in the first half, is forecasted to offset the decline in first-quarter beef production.
Placement Shifts
The closings of cattle sale barns during February’s winter storm is expected to lower expectations for placements of cattle in feedlots during the month. The Economic Research Service, however, notes that relatively high wheat prices may discourage the grazing-out of small grains pastures and move more cattle into feedlots sooner than previously expected—a factor that’s anticipated to shift placements from the second quarter to the first quarter. Overall, the Economic Research Service forecasts that some fed cattle marketings are expected to shift from the fourth quarter to the third quarter.
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Source: USDA