Friday's USDA Cattle on Feed Report indicates beef production is headed lower. The number of cattle and calves in feedlots this month was 4% below a year ago and placements of cattle into feedlots in May was down 12%. There are several possible reasons for the decrease according to USDA livestock analyst Shayle Shagam.
"One of which is we are likely looking at a smaller number of cattle outside of feedlots so the supplies in general are getting tighter," Shagam says. "Also you've had good grass in a number of areas in the
Shagam expects strong steer prices this year in the low $90 a hundredweight range before increasing in 2009 as beef production will likely be reduced.