Farmers and ranchers face a number of obstacles when it comes to their bottom line, and cattle producers are no exception. Micheal Clements shares more on the factors influencing the cattle market in 2022.
Clements: There are several issues changing the landscape in the 2022 cattle market. Bernt Nelson, American Farm Bureau Federation economist, says the biggest factors in the cattle market are inventory, drought and input costs.
Nelson: USDA’s Annual Cattle Inventory Report estimated overall January 1, 2022 Inventory down 1.89 million head or two percent. Further, the calf crop for 2021 was estimated at 35.1 million head. This is down 1.2 percent from 2020. And cattle farmers and ranchers have really been facing increases in both feed and non-feed input costs. All of these factors combine together to create a complex cattle market outlook complete with many peaks and valleys for the 2022 marketing year.
Clements: Meanwhile, the May Cattle on Feed Report estimated 12 million cattle on feed in the U.S., down two percent from last year.
Nelson: Feedlot placements were estimated at 1.81 million head, one percent below last month and slightly less than this time in ‘21. The combination between the annual inventory and the cattle on feed report have brought up the question, if inventory and the calf crop for 2021 are down then why are placements continuing to rise?
Clements: Nelson says placements are rising because of ongoing drought in Western states.
Nelson: While some of the Midwest has seen improvements and greener pastures from the drought conditions, the Southern Plains have seen drought escalate. Now, when drought conditions occur, there's a tendency to pull grazing animals off of forage early and place them into feedlots. This would be enough to throw off some of these placement and inventory numbers whenever you look at supply for the upcoming year.
Clements: Learn more on the Market Intel page at fb.org. Micheal Clements, Washington.