Pork Profit Maximizer – Foodservice Edition

July 22, 2019

According to the latest USDA semi-annual ‘Cattle Inventory’ report, released Friday, July 19, the total inventory of cattle and calves as of July 1 was estimated to be 103 million head, unchanged from the previous year and very much in agreement with the average of analyst estimates prior to the report.

Despite this agreement about the top-line number from the survey, a number of other key numbers suggest a more bullish view for fed cattle prices in 2020 and 2021. The inventory of all cows as of July 1 was estimated at 41.7 million head, 100k head or 0.2% lower than a year ago. This was the first decline in the cow herd since 2014.

The lower cow numbers were all due to a decline in the dairy herd. This was expected since USDA does offer an update on dairy inventory numbers on a monthly basis and the numbers from that survey have shown a consistent reduction. The dairy cow herd was estimated at 9.3 million head, 100k head or 1.1% smaller than a year ago. The beef cow herd at 32.4 million head was unchanged from a year ago. Both these numbers are generally in agreement with pre-report estimates.