Due to drought on the Southern Plains, producers are continuing to liquidate herds. According to Dr. Darrell Peel, a livestock marketing specialist at Oklahoma State University, the volume of feeder cattle traded through auctions in his state is up about 20 percent since the beginning of July compared to the corresponding third quarter of 2021. In addition, the proportion of feeder cattle auctioned at a live weight above 600 pounds is below normal. It is generally accepted that the cow-herd is running at an approximately ten percent liquidation rate above the April-August period in 2021. Daily cattle slaughter is within the range of 126,000 to 128,000 head per working day. In the short-term cattle futures will attain high levels. Packers are also concerned over the cost of beef as a result of inflation that may affect both supply and demand during the fourth quarter.
Longer term, reduction in number of breeder cows suggests lower supply in 2024 with resulting higher prices. This could be to the benefit of both hogs and chicken as consumer shift demand to reduce their expenditure on protein.