The latest Cattle on Feed report pegged the Feb. 1 feedlot inventory at 11.8 million head, fractionally above year-ago levels, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist in a letter called Cow-Calf Corner.
Feedlot inventories are declining after rising above year-earlier levels last October, Peel said. January placements were 92.5% of last year, above the average pre-report estimate but within the range of estimates.
2023 SUMMARY
The February On-Feed report also included a summary of 2023 final feedlot numbers and feedlot industry structure, Peel said. Total feedlot capacity was reported at 17.1 million head, up from 16.5 million in 2000.
Feedlot capacity as a percent of total cattle inventories has increased over the past 25 years to a record 19.6% in 2024, he said. On average, feedlot inventories averaged about 83% of total capacity over the past 25 years.
Feedlot capacity utilization is lower during cyclical expansions and higher during liquidation periods, Peel said. During the herd expansion from 2014-2017, average feedlot inventories were 76.3% of capacity, while during the herd liquidation from 2020-2024, January feedlot inventories were an average of 84.8% of capacity.
CAPACITY VS CAPACITY
Feedlot inventory as a percent of the total inventory of cattle in the country has increased over time. The total feedlot inventory was a record level of 16.5% of the inventory of all cattle and calves on Jan. 1. This compares to 14.3% 25 years ago.
The total Jan. 1 feedlot inventory was 14.42 million head, he said. However, this was 120.9% of the January monthly cattle on feed inventory of 11.93 million head.
Monthly cattle on feed surveys cover only feedlots with a one-time capacity of 1,000 head or more, Peel said. In the past 25 years, the total January on-feed total has averaged 122.7% of the monthly on-feed total.
So, monthly feedlot inventory totals represent about 81-82% of the total cattle on feed in the country. This relationship has not changed in the past 25 years and has varied from 80% to 82.7%.
FEEDER SUPPLIES
The Jan. 1 estimate of feeder supplies outside of feedlots was 24.2 million head, down 4.2% year over year and the lowest total back to 1972, Peel said. The current feedlot inventory is a record 59.6% of feeder supplies.
That means there are just 1.68 head of feeder cattle for every head currently in feedlots, he said. The current feedlot turnover rate is about 1.93 head, meaning that there are not sufficient feeder cattle to maintain feedlot inventories in the coming year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.46 per cwt to $185.54, compared with last week’s range of $175.66 to $184.50 per cwt. FOB dressed steers, and heifers went for $283.61 per cwt to $289.38, compared with $282.97 to $288.11.
The USDA choice cutout Wednesday was up $1.29 per cwt at $303.03 while select was up $2.54 at $292.94. The choice/select spread narrowed to $10.09 from $11.34 with 105 loads of fabricated product and 44 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $311.28 per cwt, and 50% beef was $101.96.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.35 to $1.45 a bushel over the Mar corn contract, which settled at $4.13 1/4 a bushel, up $0.05.
No contracts were tendered Wednesday for delivery against the Feb live cattle contract.
The CME Feeder Cattle Index for the seven days ended Tuesday was $246.80 per cwt, up $0.33. This compares with Wednesday’s Mar contract settlement of $249.60, down $3.40 and Apr’s $255.10, down $3.85.