The latest USDA Cattle on Feed report showed feedlot inventories at 11.505 million head on Feb. 1, down 1.8% year over year and the 15th straight month of declining feed inventories, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
January placements were down 4.7% year over year while January marketings were down 13.0% compared with last year, Peel said. January marketings likely were hampered by the winter storm at the end of the month, pushing some January marketing into February. The report was well anticipated and did not contain any surprises for the market.
AN INDUSTRY SNAPSHOT
The report also contained a summary of 2025 and a look at the structure of the cattle feeding industry, he said.
A total of 26,082 feedlots were reported in the country with 24,000 of them with less than 1,000 head capacity, Peel said. These small feedlots, amounting to 92% of all feedlots, only accounted for 12.9% of total feedlot marketings last year. Average marketings from the small feedlots were less than 126 head for the year.
A total of 2,082 feedlots with more than 1,000 head capacity (included in monthly COF reports) accounted for 87.1% of the 23.483 million head of feedlot marketings, Peel noted.
The largest feedlots included 4% with a one-time capacity greater than 50,000 head and 3% with a one-time capacity from 32,000 to 50,000 head, he said. However, the largest feedlots account for 41% of fed cattle marketed along with another 18% for the second largest category.
Thus, 7.1% of the largest feedlots marketed 58.8% of fed cattle in 2025, Peel said. For feedlots of more than 50,000 head capacity, 82 feedlots marketed 8.39 million head, or average marketings per feedlot of 102,317 head in 2025.
FEEDLOT CAPACITY
The USDA also estimated total feedlot capacity in the country at 17.1 million head, down fractionally year over year, he said. Feedlot capacity has averaged 17.07 million head for the past 20 years, ranging from 16.7 million head in 2009 to 17.3 million head in 2017.
Total feedlot capacity has varied from 17.1 to 17.2 million head since 2018. Peel said. The total feedlot inventory on Jan. 1 was 81% of total feedlot capacity; with feedlots of more than 1,000 head capacity utilizing 67% of total feedlot capacity.
The cattle feeding industry has grown relative to the overall size of the cattle industry, he said. As 2026 begins, 16.1% of all the cattle in the country were in feedlots, down slightly from the peak in 2024 and 2025.
The Jan. 1 feedlot inventory was 56.5% of the estimated feeder supply of 24.5 million head, implying there were 1.77 million head of feeder cattle available to enter feedlots relative to the current feedlot inventory, Peel said. With an estimated feedlot turnover rate of 1.99 million, the current supply of feeder cattle is not sufficient to maintain the current feedlot inventory.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $244.74 per cwt to $247.74, compared with last week’s range of $247.79 to $251.69 per cwt. FOB dressed steers and heifers went for $384.32 per cwt to $388.21, compared with $387.65 to $391.91.
The USDA choice cutout Tuesday was up $6.71 per cwt at $388.05 while select was up $0.37 at $378.58. The choice/select spread widened to $9.47 from $3.13 with 68 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $429.52 per cwt, and 50% beef was $159.68.
The USDA said basis bids for corn from feeders in the Southern Plains were $0.90 to $1.05 a bushel over the May corn contract, which settled at $4.46 1/2, up $0.00 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $369.59 per cwt, down $2.23. This compares with Tuesday’s Mar contract settlement of $357.20, down $0.07.