The USDA’s September Cattle on Feed report showed the growing regional disparities in the cattle-feeding arena, said David Anderson, agricultural economist at Texas A&M University, in a Livestock Marketing Information Center letter called In The Cattle Markets.
FEWEST ON FEED SINCE 2019
A little more than 11 million cattle were in feedlots with a 1,000-head one-time capacity on Sep. 1, down 1.1%, compared with last year, Anderson said. This was the fewest for a September since 2019.
States in the Southern Plains and Southwest reported fewer cattle on feed, while states further north reported more cattle on feed, he said. Furthermore, the Southern Plains of Texas, the state with the most cattle on feed, reported on-feed numbers down 9.1% from last year and the fewest for a September since 2016. Arizona, California, Colorado and Oklahoma also reported fewer cattle on feed than last year.
BORDER CLOSURE EVIDENT
Clearly, the border closure to cattle from Mexico is taking its toll, Anderson said. Feeder cattle imports from Mexico normally increase in the Fall, so the disparity in regional feeding inventories is likely to grow, including Nebraska possibly supplanting Texas as the largest cattle feeding state.
More cattle were on feed in more northern regions, led by Nebraska and Kansas, up 4.7% and 3.1%, respectively, he said. More cattle also were on feed in Iowa and South Dakota, with larger cattle inventories reported in the Pacific Northwest states of Washington and Idaho.
MARKETINGS ALSO DOWN
August marketings were down 13.6% from last year in the September report, Anderson said. The decline was partly because of one less slaughter day in the month compared with last year.
But, regardless of the number of work days in the month, marketings are smaller as on-feed numbers tighten, he said. Marketings during the month were the fewest in the data going back in their current format to the mid-1990s.
On the placement side of the ledger, 9.9% fewer cattle were sent to feedlots in August compared with last year, Anderson said. Texas placements were 18.1% fewer than last August. Only Arizona and Washington placed more cattle than last year.
MORE RECORDS LIKELY
It’s likely there will be more of these “records” for marketings, placements and total cattle on feed broken in the coming months, he said. Cattle numbers have declined cyclically, leading to fewer cattle to place and market.
Historically, each cycle since the mid-1970s has had smaller peaks and troughs in cattle numbers than the previous cycle, Anderson said. And, as herd rebuilding begins, fewer heifers will be placed, pulling on-feed numbers down further.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $231.60 per cwt to $241.00, compared with last week’s range of $238.09 to $244.00 per cwt. FOB dressed steers and heifers went for $365.79 per cwt to $375.71, compared with $373.45 to $379.73.
The USDA choice cutout Tuesday was up $2.63 per cwt at $365.97 while select was up $0.91 at $348.88. The choice/select spread widened to $17.09 from $15.37 with 140 loads of fabricated product and 46 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $427.19 per cwt, and 50% beef was $138.95.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.00 to $1.20 a bushel over the Dec corn contract, which settled at $4.19 3/4, down $0.02.
The CME Feeder Cattle Index for the seven days ended Monday was $364.24 per cwt, up $0.77. This compares with Tuesday’s Oct contract settlement of $365.50, up $3.10.