On July 21, the USDA National Agricultural Statistics Service (NASS) released its biannual Cattle report. According to the report, on July 1, 2023, all cattle and calves were estimated at 95.9 million head, down 2.7 million head, or nearly 3%, from July 2022.

Since January, slaughter data has indicated a 12% decline in beef cow slaughter. This is likely a combination of improving pasture conditions, sufficient reductions in animal units per acre on poorer pastures and the prospect of improved profitability from selling calves.

With generally improving pastures and lower expected feed costs this year, the demand for feeder calves is well supported.

Since October 2022, drought conditions have improved for much of the country, to the point where less than 24% of the U.S. is under drought conditions.

The forecast for first-quarter beef production is lowered 25 million pounds, based on USDA Agricultural Marketing Service reports of federally inspected livestock slaughter, showing a slower pace of fed cattle slaughter and lower aggregate carcass weights than expected last month.

The forecast for first-quarter beef production was raised 15 million pounds based on a faster expected pace of cow slaughter in the latter part of the quarter that will more than offset less bull slaughter and lower aggregate carcass weights.

The total number of all cattle and calves on Jan. 1, 2023, was estimated at 89.3 million head, about 2.8 million fewer than the previous year. This marks the fourth year of contraction for aggregate beef and dairy cattle inventories, in the ninth year of the current cattle cycle – the cyclical expansion and contraction of the national cattle herd over time.

Based on the most recent U.S. Drought Monitor data, the impact of drought continues to be a theme into the new year even as rains bring relief to beef cattle producers in parts of the West.

Beef production forecast for fourth-quarter 2022 is raised by 70 million pounds on higher expected total cattle slaughter, along with slightly heavier carcass weights. Total 2022 beef production is projected at 28.4 billion pounds, an increase of nearly 2% from 2021.

Beef cattle producers continue to face widespread drought and higher operating costs as the holidays approach.