Source: USDA
Comparing Annual Inflation Rates in 2023 and 2024
The Department of Labor’s Bureau of Labor Statistics released its annual Consumer Price Index, CPI, for 2024 on January 15, 2025. The chart below compares inflation rates in 2023 and 2024 for overall prices, food in general, and selected animal product groups. There are seven items in the chart below.
Inflation was lower in 2024 than in 2023 for four of the seven. In 2023 inflation was highest for food, at 5.8 percent, and for all-items at 4.1 percent. Dairy and related products had the lowest inflation rate between 2023 and 2024; their index decreased by 0.2 percent. The index for poultry increased only 0.8 percent, and for pork 1.3 percent. In 2024 food price inflation, 2.3 percent, was lower than the all-items inflation of 2.9 percent. The CPI for beef and veal increased by 5.4 percent in 2024, while eggs increased 8.5 percent.
Summary
Based on preliminary December slaughter data, expected fourth-quarter 2024
production has been lowered from last month, bringing the annual total to 26.985 billion pounds. The beef production forecast in 2025 has been raised to 25.790 billion pounds due to heavier expected carcass weights and higher anticipated fed cattle marketings. Projections for most cattle prices are raised from last month on strong demand. Beef trade estimates for 2024 are raised to reflect recent data. The import forecast is raised based on strong weekly import data and firm domestic demand, while the export forecast for 2025 is unchanged.
by: Russell Knight and Hannah Taylor
New World Screwworm
On November 22, 2024, the discovery of New World Screwworm in cattle in the Mexican State of Chiapas resulted in the import restriction of cattle and bison originating from or transiting through Mexico. Forecasts in this report reflect this restriction, and in the absence of the certification by the respective Government authorities of facilities that control meat import protocols, these restrictions are assumed to remain in-place for the duration of the forecast period. Subsequent WASDE forecasts will reflect any officially announced changes in policy when they occur.
Proportion of 2024 Heifer and Cow Slaughter Is Third-Highest
Although USDA, National Agricultural Statistics Service (NASS) commercial slaughter estimates for the month of December 2024 are not yet published, the USDA, Agricultural Marketing Service (AMS) has published Actual Slaughter Under Federal Inspection through the end of the year. This allows for a comparison of year-to-year federally inspected slaughter by class, specifically the slaughter mix as a proportion of total slaughter. In 2024, steer and heifer slaughter in the total mix showed the only year-to-year increase. Meanwhile, beef cow slaughter had the largest year-over-year decline, followed by dairy cows and bulls.
Examining heifer, beef cow, and dairy cow slaughter as a percentage of total slaughter offers an indication of producer intentions for maintaining or growing their herds in the coming year. As a proportion of total slaughter, heifer and cow slaughter declined by almost 2 percentage points from 2023. However, it remains the third-highest share over the last 25 years. A year ago, hay prices for 2024 were expected to decline as forage supplies grew, and as a result, calf prices were expected to rise to improve producers’ operating margins and support their willingness to retain heifers and cows.
The chart below shows heifer and total cow slaughter as a percent of total cattle slaughter under Federal inspection from 2000 to 2024. Further noted in the chart are the 10 years with the highest ratios to total slaughter. At 49.8 percent, 2024 was the third-highest average weekly percentage since the series began in 1986, behind 2022 and 2023. The last 6 years are the highest for the last 25 years.
2024 Production Forecast Revised Lower on Recent Data
Considering preliminary slaughter data for the month of December, the forecast for fourth-
quarter 2024 production is lowered 50 million pounds from last month. The change reflects a marginal decline in all classes of slaughter from last month’s forecast. The decline in slaughter is partially offset by higher carcass weights than previously expected. Heavier carcass weights likely reflect both the large proportion of steers and heifers in the slaughter mix and general weight gains by steers and heifers coming out of feedlots. As a result, total commercial beef production in 2024 is estimated to have been 26.985 billion pounds, an increase of 0.1 percent from 2023.
2025 Production Higher on Fourth-Quarter 2024 Placements
According to the latest Cattle on Feed report, published by USDA, NASS, the December 1
feedlot inventory is estimated at 11.982 million head, less than 1 percent below 12.016 million head estimated for December 1, 2023. Feedlot net placements1 in November 2024 were nearly 4 percent lower year over year at 1.741 million head. Marketings in November tallied 1.725 million head, down over 1 percent from a year ago. The relatively large month-to-month decline in marketings of nearly 7 percent kept large feedlot inventories near year-ago levels. Considering the three largest cattle feeding States, as of December 1, the number of cattle on feed in Texas and Kansas was down 1 and 3 percent, respectively, from the last year, while for Nebraska it was up 1 percent.
On January 31st, NASS will release the Cattle report. This report will provide estimates of cows and heifers available for breeding, as well as insight into calves available in early 2025 for placement in feedlots during the year.
For 2025, the beef production forecast is raised 125 million pounds from last month to 25.790 billion pounds, a decline of more than 4 percent from 2024. In the first quarter of 2025, the production forecast is lowered to reflect a temporal shift in fed cattle slaughter from the first quarter to the second, with high fed cattle prices and tight cattle supplies dampening marketings early in the year. Lower slaughter rates are partially offset by heavier expected carcass weights. The second-quarter beef production forecast is raised to reflect the shift in marketings from the first quarter, as a greater share of cattle in feedlots are expected to have been on feed for more than 5 months. Third- and fourth-quarter production forecasts are raised on higher expected fed cattle marketings. The increase in second-half 2025 marketings reflects higher-than-previously- estimated placements in fourth-quarter 2024 that shifted expected marketings.
Cattle Prices Have Strong Start to the New Year
Since November 22nd, cattle have not been able to be imported from Mexico. This has limited feeder cattle typically available to feedlots in the Southern Plains. These feedlots are likely drawing down on supplies from other U.S. areas, boosting feeder calf prices.
In December, the weighted-average price for feeder steers weighing 750–800 pounds at the Oklahoma City National Stockyards was $268.45 per hundredweight (cwt), a $15.65 increase from November. In the January 6th sale, feeder steers averaged $269.48 per cwt, a slight increase in price from the previous sale on December 16th and nearly $54 above the same week last year. This price strength was carried over into the forecasts for first and second quarter 2025, which were raised to $268.00 and $272.00 per cwt, respectively. The 2025 annual price forecast is raised to $273.75, about 9 percent higher than 2024.
Wholesale beef prices have finished 2024 on a strong note, carrying record beef prices into
2025. The strength of this wholesale beef price trend likely helped support record slaughter
cattle prices through the holiday season. On January 9, live slaughter steers sold on a
negotiated basis in the 5-area marketing region set an all-time high of $202.80 per cwt. For the first full week of 2025, prices averaged $200.56 per cwt, more than $26 above the same week last year. This price strength was carried over into 2025 price forecasts for slaughter steers that were increased across the quarters. The annual price forecast is $195.50 per cwt, an expected increase of more than 4 percent from 2024.
Adjustments Made to 2024 and 2025 Beef Trade Estimates
Adjustments were made to the 2024 beef trade estimates as one more month of official data is remaining to round out the year. The tables below provide a breakdown of monthly and January–November beef trade with the top trading partners. Monthly beef exports in November were larger than expected, with strong shipments to Taiwan and South Korea. November exports to Taiwan were nearly 41 percent higher year over year, bringing the total year-to-date exports to Taiwan above 2023 for the first time all year. Monthly exports to South Korea were more than 21 percent higher year over year. Of the top six markets, only exports to Japan and Canada were lower year over year in November, both by less than 1 percent. Beef exports have continued to hold strong, despite high U.S. beef prices and a strong U.S. dollar against most major currencies. Based on recent trade data, the export estimate for fourth-quarter 2024 is raised 35 million pounds to 745 million, bringing the annual total to 2.995 billion pounds. The 2025 export forecast is unchanged from last month at 2.595 billion pounds.
Beef imports in November topped 400 million pounds again, only the fifth monthly import to do so, all five of which have occurred within 2024. The table below shows that imports from Australia and Brazil continue strong, with January–November imports up 67 and 60 percent year over year, respectively. November imports from Uruguay were also substantially higher year over year, up 26 million pounds or nearly 180 percent. Based on recent data, the expectations for fourth-quarter imports are raised 30 million pounds to 1.200 billion, resulting in an estimate of 4.618 billion pounds for 2024.
The chart below compares the quota fill rates from the U.S. Customs and Border Protection
Commodity Status Report in the last week of the year in 2023 and 2024. According to the report from the last week of 2024, the quota status for almost all beef tariff-rate quotas was listed as either filled or potentially filled (an advisory status given to quotas that reach a certain percent fill rate, usually around 95 percent). Only the quota for New Zealand was listed as open. The quota for Australia reached over 96 percent filled; the last time this quota was filled before the end of the year was in 2015.
First-quarter 2025 is expected to be another record quarter as imports are frontloaded early in the year to take advantage of quotas that reopened on January 1, especially the quota for countries without a specific quota or free trade agreement (Other in the figure). This quota had been filled since February of last year. Once the quota is filled, beef imports from the countries subject to this tariff-rate quota will be subject to a higher tariff. The largest contribution to the Other quota has been imports from Brazil. As of January 6, 2025, the quota for “Other” countries in 2025 was already 73 percent full, according to the U.S. Customs and Border Protection Commodity Status Report.
Based on the continued strong imports from South America and Oceania, the first- and second- quarter import forecasts are both raised 30 million pounds to 1.230 and 1.070 billion pounds, respectively. The annual import forecast for 2025 is now 4.770 billion pounds, a 3-percent increase year over year.
1 Net placements are placements minus other disappearance.
