Friday's USDA Cattle on Feed report shows producers put about 11% fewer animals in feedlots during March than they did a year ago. With marketings out of those feedlots falling slightly coupled with heavy placements earlier in the year, U.S. feedlots have inventories slightly higher than a year ago and the second highest April inventory on record. According to USDA livestock analyst Shayle Shagam, this has a very bullish undertone.
"What this implies is that basically there's going to be a little bit less beef coming out feedlots as we move into the summer months," Shagam says.
Lower numbers coming from feedlots should help prices, which Shagam predicts to average in the low $90 a hundredweight range for steers. But even with prices in the low $90s, producers are facing very high grain prices which are squeezing margins. Shagam says that there are very few people right now in the beef cattle business that are making much money, with many losing money.