US Feedlots continued a strong marketing pace in October with sales to packers up 4.6% year over year, despite one less business day in the month, said Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist in a release.
October placements followed the September pattern with another 5% reduction from October 2015, Peel pointed out. The combination of large marketings and fewer placements left the Nov. 1, 2016, cattle on feed inventory down 1.3% from a year ago.
Despite those year-over-year decreases in placements, annual feedlot placements are up 673,000 head from 2015, a 3.9% increase, Peel said.
However, feedlot marketings through October are up 5.2% from 2015, 855,000 head more than the same period last year. And in the last six months, the year-over-year marketings increase has been more than double the increase in the number of cattle placed in feedlots compared with last year.
MORE-THAN-EXPECTED BEEF PRODUCTION
The faster pace of cattle movement through feedlots has translated into more cattle slaughter and more beef production than expected, Peel said. Year-to-date beef production was up 5.3%.
Steer slaughter in particular has exceeded expectations this fall and is up nearly 7% from last year, although this was expected to moderate for the rest of the year. This, combined with year-over-year increases in heifer and cow slaughter, has pushed total slaughter up 5.6% this year.
Increased slaughter was partially offset with lower carcass weights since May, Peel said. Weekly steer carcass weights have averaged nine pounds less since May with heifer and cow carcass weights down about two.
Carcass weights have been down from last year’s records despite excellent feeding conditions this fall, he said. Steer and heifer carcass weights appeared to peak seasonally the last week of October and should decline for the rest of the year.
The first winter storm, which covered the central and northern plains last week, may help cut weights faster in November, Peel said.
The decrease in September and October feedlot placements likely means some feeder cattle are being retained and will be pushed into next year, he said. There has been plenty of incentive to retain them this fall, which could mean some increase in 2017 feeder supplies on top of already growing feeder supplies from a bigger 2016 calf crop.
However, growing domestic feeder supplies are being partially offset by a 336,000-head, or 29%, decrease in Mexican and Canadian feeder cattle imports through September.
Those delayed fall feeder cattle are not expected to burden feeder markets excessively unless they get bunched up next spring, Peel said. But they are being held in a wide variety of stocker and backgrounding programs and likely will be spread out in weight and timing next spring.
Wheat pasture stocking has been slow this fall and additional stocker placements on wheat may continue after Jan. 1 as producers look to graze out more acres unless wheat market prospects improve significantly.
CASH CATTLE MARKETS UP $4
Live-basis cash cattle trading Wednesday was up $4 per cwt from last week at $109 to $113, mostly $112. Dressed-basis prices were steady to up $2 at $170.
Wednesday, cattle sold in the online Superior Auction at an average of $109.14 per cwt live, up from $106.79 last week.
The USDA’s choice cutout Wednesday was $1.42 per cwt higher at $186.64, while select was up $0.95 at $170.12. The choice/select spread widened to $16.52 from $16.05 with 119 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $128.00 per cwt, up $0.46. This compares with Wednesday’s Jan settlement at $124.90, up $0.85.