Too early to call it?

April 22, 2025

Market Morsel

Monthly data on female cattle slaughter ratio (FSR) in the USA is now available to the end of February 2025 and it shows that the US herd is moving closer toward a rebuild phase beginning, but they are not there just yet. The level of female cattle slaughter has started 2025 below where it began 2024 and is also under the seasonal average trend, based upon the last decade of data but it is still shy of indicating that the herd is in rebuild.

The January 2025 FSR in the US was 49% and February lifted marginally to 49.6%, placing the annual average for 2025 at 49.3% thus far. Analysis of the annual average FSR versus annual cattle herd change shows that 48% is the historic threshold between rebuild and liquidation. In January 2025 the United States Department of Agriculture (USDA) estimated the US herd at 86.7 million head, a 0.6% drop from January 2024 herd estimates and signifying a sixth year of liquidation. However, the pace of liquidation has been easing over the last few years. The directional trend in the FSR moving toward the 48% threshold and the pace of the liquidation slowing suggests we are not too far away from entering a rebuild phase now.

Indeed, the number of heifers on feed as a proportion of total cattle on feed has also been reducing over the last few months, this is another indicator that a stronger intent to retain heifers is beginning to appear. Heifer proportions on feed have dropped from a peak nearer to 40% in 2024 to dip under 38% in recent months. Since 1997 the long term average percentage of heifers on feed sits at around 37%, a move below 35% in the coming months will begin to signal that breeding stocks are being held back to begin to grow the US herd. The annual average FSR and cattle herd change scatter plot shown below also reinforces the fact that the US herd isn’t far away from entering a rebuild phase. As the scatter plot highlights, the annual average FSR value is a very reliable indicator at measuring where in the cycle the cattle phase is situated – either in rebuild or liquidation. Indeed, over the last four decades it has only been wrong 3 times at predicting if the herd is rebuilding or liquidating – that’s an accuracy rate of around 93%.

We will keep an eye on the US FSR as the year progresses and update you once we think there is a clear signal that the rebuild has begun. Keep an eye out for the weekly email and make sure you are subscribed on this link, so you don’t miss the updates.

Too early to call it?

Market Morsel

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