US cattle feedlot placements drop amid supply challenges

US cattle put in feedlots in April totaled 1.613 million head, down 2.6% from 1.656 million head in April 2024, the US Department of Agriculture said in its latest Cattle on Feed report.

The number of cattle placed in feedlots in April was down 12.4% from the 1.841 million head during March, the USDA showed in the May 23 report.

According to S&P Global Commodity Insights data, placements were the lowest for any April since 2016, excluding the 2020 COVID-19 year.

"If Mexico is down all year, there would be a reduction of 1 million head in placement availability," said Kevin Coburn, director of meat and livestock analysis for Commodity Insights, referring to the US' border closure to Mexican cattle imports.

In response to the US cattle-import restrictions, Mexican cattle feeders are buying cattle in the country's northern states normally exported to the US with the intent of having the cattle slaughtered in Mexico and the beef exported to the US, a source said May 22 during the US Meat Export Federation Congress in Fort Worth, Texas. Such cattle buys were typically made from herds in southern Mexico or Central America, the source added.

New world screwworm has been spreading from Central America to Mexico, and some analysts at the US Meat Export Federation conference said they expected it will be in the US sometime in the summer. They said it will not represent a threat to US beef exports, but it will bring some logistical issues to the US.

Marketing of fed cattle, or outflows of cattle from feedlots, during April, totaled 1.825 million head, down 2.5% from April 2024, the USDA data said in its Cattle on Feed report.

The number of US cattle on feed totaled 11.376 million head on May 1, down 2.3% from 11.638 million head on April 1 and down 1.5% from the 11.554 million head on May 1, 2024, the USDA said.

Imports

US beef imports from Australia and New Zealand rose during the weekended May 26.

US imports of Australian beef reached 157,960 mt, or 41.76% of the annual quota of 378,214 mt, as of May 26, US Customs and Border Protection data released May 27 shows.

The quota allocated 10,278 mt for the week to May 26, up 29.8% from 7,920 mt allocated the previous week.

US imports of New Zealand beef reached 91,294 mt, or 42.78% of the annual quota of 213,402 mt, Customs said. The quota allocated 5,011 mt for the week to May 26, well above 775 mt imported the previous week.

Prices

"The US has a cattle inventory problem but not a beef production problem," said Erin Borror, vice president and economic analyst at the US Meat Export Federation.

Despite the lower availability of cattle, there is a stable production of beef as feedlots are putting more weight per head, sources said.

Despite the slow rate of cow and bull slaughter, a large volume of imports before 10% US tariffs came into effect, imports which have not been sold yet, pressured the price of lean beef trimmings imports.

Platts, part of Commodity Insights, assessed the price of 90CL beef CIF US at $6,460/mt, or $2.93/lb, for 30-60 day shipment period May 27, down $66/mt, or 1%, from previous day and week on week; but up $552/mt, or 9.3%, from May 27, 2024.

According to the USDA, placements are steers and heifers put into a feedlot, fed a ration to produce a carcass that will grade select or better, and are intended for the slaughter market.

Cattle on feed are steers and heifers being fed a ration of grain, mostly corn, silage, hay and/or a protein supplement such as dried distillers grains with solubles or soybean meal, ahead of slaughter. It excludes cattle held back for later sale to feedlots, and only feedlots with a capacity of 1,000 animals or more are considered.

The cattle on feed and placements data are indicators of the US supply of beef and US demand for corn, soybean meal and DDGS.