As the dust settles on Friday’s December USDA Cattle on Feed report, industry consultant Nevil Speer said in an email that the report was “the definitive statement of slow placements.”
Speer advised a strong risk-management strategy for cattle producers and growers to protect the investment equity.
“Nothing really changes,” he said. “Until it does (and when it does—get ready)….”
PLACEMENTS REMAIN LOW
The on-feed report showed that 1.595 million feeder cattle were placed into US feedlots of 1,000 head or more one-time capacity in November. This was the smallest November placement rate in series history and less than the pre-report average analyst and trader estimate of around 1.660 million head, he said.
And, combined with September and October placements, the three-month placement number also was the smallest in series history, Speer said.
The 11-month 2025 placement total equals 19.19 million head, making 2015 the only year with a smaller total, he said. That total was 18.91 million head.
“We’re short on feeder cattle (i.e. Mexico). And as long as feed is cheap, cattle feeders (are) just gonna continue to trickle out marketings—and cattle stay BIG!!” he said.
MARKETINGS ALSO HISTORICALLY SMALL
November marketings, at 1.521 million head, were down 12% from 2024’s 1.725 million head, Speer pointed out. And, while the number was in line with pre-report estimates, it still ranked the fifth smallest in series history. The only months with a smaller marketings number were April of 2020, November of 2014, May of 2020 and February of 2015.
However, fed beef production in November out-paced November of 2014, the previous cycle price peak by 12%, or nearly 184 million pounds, he said. And, November’s fed market average price of about $221 per cwt out-paced November 2014’s price of around $170 per cwt by 30%.
FRONT-END SUPPLIES GROWING
Speer pointed out that supplies of cattle that had been on feed for long periods of time (possibly to grow into larger animals) were growing.
The calculated number of cattle that had been on feed for 150 days or more was 2.953 million head, up about 25% from 2.362 million last year. The number of cattle that had been on feed for 180 days or more was about 1.596 million, up about 83% from 855,000 last year.
The rise goes to show the intensity with which cattle feeders are growing larger cattle, and the result is more beef than would be expected with last year’s feeding schedules.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $229.81 per cwt to $230.49, compared with last week’s range of $225.74 to $232.96 per cwt. FOB dressed steers and heifers went for $359.96 per cwt to $360.17, compared with $353.34 to $363.91.
The USDA choice cutout Monday was up $1.24 per cwt at $362.87 while select was up $4.67 at $350.69. The choice/select spread narrowed to $12.18 from $15.61 with 50 loads of fabricated product and 17 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $389.97 per cwt, and 50% beef was $127.52.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.90 to $1.10 a bushel over the Mar corn contract, which settled at $4.47, up $0.03 1/4.
No live cattle contracts were tendered for delivery Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $351.91 per cwt, up $0.73. This compares with Monday’s Jan contract settlement of $346.50, up $0.90.