USDA’s January 1 cattle inventory report places the total number of cattle and calves at 89.3 million head, consistent with trade expectations for a three percent decline from a year ago. The decline comes as cattle producers face a fourth consecutive year of contraction within the cattle cycle.
That’s approaching inventory lows last seen in 2014 and 2015, at the start of the current cycle, when producers began rebuilding following the drought in 2012. Beef production is anticipated to be 6.5 percent lower in 2023 than last year. University of Illinois Economist Jason Franken suggested that all things considered, prices in 2023 are likely to exceed those of the last couple of years.
Current conditions are even bringing about speculation on the possibility of exceeding record prices last set in the 4th quarter of 2014. Franken says that seems feasible for fat cattle, which are already trading around $156 per hundredweight.