If Kansas feedlot managers followed the trend in fed cattle sales to packers in January, the sales number will be down from December.
Kansas feedlot managers made up for lost sales to packers in October with a rebound in November and a sharp rise in December that mimicked the December 2016 jump.
The Kansas State University Extension Service collects data from select feedlots across the state and the Livestock Marketing Information Center compiles the data.
The data show that October’s drop in sales to packers, known as marketings, was an anomaly. With sales in September and November near the 2016 levels and December’s jump that followed closely the 2017 December rise.
But lest the market should get too excited, the data also show that Kansas feedlots marketed fewer cattle in January of 2017 than they did in December of 2016. And December’s jump in fed cattle sales could mean that January 2018 marketings also were down from December’s.
What is less clear is whether January 2018 marketings will be above January 2017’s.
FEEDING COSTS REMAIN LOW
However, the cost of feeding those cattle remained subdued when compared with the 2011-2015 average.
The cost of the feed needed for every 100 pounds of gain for those December sales averaged $76.35, according to the KSU data. This was $6.61, or 9.48%, above the December 2016 level of $69.74 but $21.89, or 22.3%, below the previous five-year average of $98.24.
The 2012-2016 average will decline from the 2011-2015 level as the drought years are winnowed out and more recent data with more corn production and lower prices is factored in.
DAYS ON FEED CONTINUE CLIMB
With more demand for choice or prime beef and lower feed costs, Kansas feedlots continue to feed cattle for longer periods of time than in many previous years.
K-State feedlot survey data show that cattle sold to packers in December spent an average of 168 days on feed, up five, or 3.07%, from November’s 163. However, the data also was $26.00, or 18.3%, above the 2016 level of 142 days and $22.60, or 15.5%, above the previous five-year average of 145.4.
Given the continued reasonable costs of feed and continued strong choice and prime beef demand, the average number of days cattle are kept in a feedlot may continue to rise.
However, other factors may come into play in coming months despite the strong beef demand. A bad production year could raise the cost of feed. Drought in certain parts of the country could send cattle to the feedlots at a younger-than-desired age, forcing them to spend a little longer on feed than desired.
The whole interplay of feed costs, feeder cattle costs and fed cattle prices will play a greater role than strictly beef demand.
CATTLE, BEEF RECAP
Cash cattle sold last week in the Plains at $126 per cwt on a live basis, steady to down $1 from the bulk of the previous week’s transactions. On a dressed basis, cattle sold steady at $200.
No cattle were sold last Wednesday on the Livestock Exchange video auction.
The USDA’s choice cutout Tuesday was down $1.00 per cwt at $208.43, while select was off $1.43 at $202.73. The choice/select spread widened to $5.70 from $5.27 with 93 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $147.95 per cwt, down $0.17. This compares with Tuesday’s Mar settlement of $148.72, down $0.95.