Trends . . .  MID-YEAR  CATTLE  INVENTORY  BELOW  A  YEAR  AGO

On Friday, July 23^rd, USDA-NASS reported that the mid-year U.S. cattle and calf inventory posted another year-to-year decline as of July 1, 2010.  The report further confirmed that cow-calf producers have continued to reduce their herds despite higher calf prices.  The decline in cattle numbers is mostly due to a variety of factors including production costs that remain high relative to historical standards, record high cull cow prices, and continued uncertainty in the market.  Looking ahead, tighter supplies of available cattle will be supportive to fed and feeder cattle prices in 2010 and 2011.  However, the degree to which the economy recovers will be a key factor in domestic beef demand and thus cattle prices over the next year.

SHEEP  FLOCK  DECLINES

Also released on Friday was the July 1 Sheep report, which reported another year-to-year decline in the U.S. sheep flock.  According to USDA, the U.S. sheep and lamb flock totaled 6.9 million head, 150 thousand head less than a year ago and five percent below 2008’s mid-year number.  The yearly decline in lamb numbers in the January and mid-year reports has been reflected in the modest decline in the number of available feeder and slaughter lambs this year.

COLD  STORAGE

      On July 22^nd, USDA-NASS released the monthly Cold Storage report, which showed stocks of red meat at the end of June below a year ago, mostly due to much lower frozen beef and pork stocks.  Total frozen supplies of poultry were below a year ago, however the decline was the result of below year ago stocks of turkey as supplies of frozen chicken were above a year ago, the result of trade bans on U.S. chicken exports with Russia this summer.  Nonetheless, the year-to-year declines in frozen stocks of red meat confirm earlier trends of tightening supplies of red meat and poultry this year.