Livestock Monitor – 4/25/2025

CATTLE ON FEED AND HERD REBUILDING

As of April 1, 2025, the latest Cattle on Feed report from USDA-National Agricultural Statistics Service (NASS) reported that cattle on feed in feedlots of 1,000+ head capacity were down -1.6% to just over 11.6 million head. This was in line with pre-report estimates, which had cattle on feed down -1.7% on average. April marked the fifth consecutive month where the cattle on feed inventory was reported down from the prior year. Cattle marketings during March were reported up +1.1% to just over 1.7 million head. This was slightly above the average pre-report estimate of +0.7% above a year ago. March placements of cattle had a wide range of pre-report expectations, which ranged from down -1.0% to up +6.4% with an average of +3.7%. Actual placements in March were towards the upper range of estimates coming in +5.1% above a year ago to more than 1.8 million head.

The April Cattle on Feed report also provided a breakout of steers and heifers on feed, which only occurs once every quarter. The quarterly breakout of steers and heifers on feed allows for the calculation of heifers on feed as a percent of total cattle on feed, which was 37.6%. This is the lowest percentage of heifers on feed in five years when it was 37.4% in the April 2020 report. A lower percentage of heifers on feed potentially signals that producers may be looking to hold back heifers and retain them for herd rebuilding efforts. During the last herd rebuilding phase, in roughly late 2014 to 2018, heifers on feed as a percent of total cattle on feed dipped to 31.0% because producers were actively retaining heifers for breeding purposes. The 37.6% from April’s report is low, but it is not enough concrete evidence to signal that in aggregate producers are actively rebuilding the herd. A better picture will start to form as more data becomes available and a key piece of the picture will be the July 1 Cattle inventory report from USDA-NASS.

COLD STORAGE

End-of-month meat stocks in cold storage were reported yesterday by the USDA-NASS for the month of March. Within red meat, total beef in cold storage increased by +0.7% compared to the same time last year, reaching 427 million pounds. Gains were driven primarily by a +10.2% increase in beef cuts to 40 million pounds, whereas boneless beef declined only marginally by -0.2% to 387 million pounds. Total pork stocks in cold storage declined by -8.8% year over year, totaling 422 million pounds. The overall decrease came from notable reductions in bellies (-25.5% to 55 million pounds), variety meats (-23.2% to 20 million pounds), and loins (-7.9% to 37 million pounds); hams and bone-in picnics posted gains of +4.5% and +46%, respectively, rising to 73 and 7 million pounds.

In poultry, chicken in cold storage rose by +3.5% from a year ago to 773 million pounds. Increases were driven by higher stocks of breasts (+13.7% to 252 million pounds) and wings (+8.6% to 56 million pounds), although modest declines were noted in drumsticks (-4.8% to 28 million pounds) and thigh meat (-8.3% to 13 million pounds). Turkey in cold storage declined by -14.7% year over year to 305 million pounds with losses observed across all major categories. The most significant decreases came from breasts (-14.4% to 77 million pounds) and whole birds (-6.2% to 143 million pounds).

Dairy products in cold storage showed mixed results with butter stocks having increased by +4.0% from last March to 324 million pounds while total cheese stocks declined by -4.3% to 1.4 billion pounds. Within cheese, the decline was largely due to a -4.2% drop in American cheese to 794 million pounds. Swiss cheese saw the opposite with an increase of +6.7% to 23 million pounds.

DAIRY MARKET UPDATE

This year’s dairy markets are tracking close to expectations that are driven by the recovery in milk and dairy product prices last year. The milk cow herd was up a little more aggressively than expected at the start of the year, leading to more supply than expected, which kept a lid on dairy prices as the first three months progressed. 

USDA-NASS reported earlier this week that the milk cow herd in March increased 8,000 head from the prior month, up 49,000 head from the end of 2024 and 57,000 head more than twelve months ago. Milk per cow during the first quarter of 2025 was down close to -1% from a year ago, mostly due to one less day in February. One less day to milk cows in the quarter offset the effect of more cows being milked, so total milk production was down slightly during the quarter from a year ago.

At the start of the year, dairy herd expansion was highlighted by a 15,000 head increase in Idaho.  There was some moderation in February and March, as cow numbers fell back 3,000 head. Other states have registered significant gains in the last two months, most notably in Texas, New Mexico, and South Dakota. Cheese and butter prices trended lower in February and March, which is expected to slow the number of cows being added to the dairy herd this spring. The forecast shows the dairy herd in the spring quarter averaging 9.413 million cows compared to the March milk cow tally of 9.404 million cows. For the second half of the year, the milk cow herd is pegged in the 9.400-9.410 million head range. This milk cow herd would be 50,000-60,000 head more than the last half of 2024. The additional cows result in milk production for this year being up about +1% from last year.

The milk price forecast for this year changed very little from recent months. Cheese and butter price forecasts have been adjusted slightly lower, mostly due to a little less consumer spending on food.  Retail sales at foodservice and drinking places in the first quarter of 2025 were up +2.8% from a year earlier compared to a +3.7% year-over-year increase in the last quarter of 2024. This may have been a factor in cheese and butter price weakness during the last two months. Grocery store sales in the first quarter of 2025 were up +2.2% from a year earlier compared to a +2.8% year-over-year gain in the last quarter of 2024.

The All-Milk price at the farm reported by USDA-NASS for the first quarter of 2025 should be close to $23.50 per cwt. This is up close to $3.00 from a year earlier. The All-Milk price for the year is expected to be close to $23.50, about $1.00 higher than last year.

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