10-6-25 – Total feedlot production is declining more rapidly than the slowly declining feedlot inventories would indicate, said Derrell Peel, Oklahoma State University livestock marketing specialist, in a letter called Cow-Calf Corner.
The Sep. 1 feedlot total was 11.08 million head, down 1.1% year over year and the 10th consecutive monthly decrease compared with a year earlier, Peel said.
Feedlot inventories continue to decline slowly, Peel said. Average inventories the past year were down just 3.1% from the peak in 2022, but the September 12-month moving average was the lowest since January 2019.
AUGUST LIKELY SEASONAL LOW
With the September on-feed total up slightly from the previous month, the August total likely was the seasonal low for the year, he said. The feedlot inventory on Aug. 1 this year was the lowest monthly inventory since October 2017.
Feedlot placements in August were 90.1% of last year and the smallest August placement total since 2015, Peel said.
A graph showing the relative comparison between 12-month moving averages of cattle on-feed and feedlot placements shows placements declined more than the on-feed inventory up to this point aided by a slower turnover rate in feedlots.
August marketings were down 13.6% compared with last year, he said. Feedlot marketings for the first eight months of 2025 were down 5.4% year over year.
Average feedlot marketings the past year were down 8.2% from peak average marketings in 2022, Peel said. Smaller calf crops and limited feeder cattle supplies mean there are fewer cattle available for feedlot production.
He said he expected feedlot production and beef production to continue declining into 2027.
SEASONALITIES POINT TO RISING ON-FEED INVENTORIES
A look at a Livestock Marketing Information Center graph of USDA-reported monthly placements of feeder cattle into feedlots with a one-time capacity of 1,000 or more head indicate that June placements are the low point in the year. From there, they turn higher to peak in October.
That means, month-to-month feedlot placements have been rising for the last two reporting months.
But that doesn’t mean monthly placements will rise above last year or the 2019-2023 average. All predictions point to fewer year-over-year monthly placements through the rest of this year.
Many market analysts also foresee fewer monthly feedlot placements than a year earlier well into next year and possibly through the year. This is especially true if cow/calf producers begin holding heifers back for breeding.
However, the high price of heifers for the feedlot makes retaining some for breeding a difficult, and costly, move, the analysts said. Once a heifer is sold for feeding, the producer has severed all risks associated with keeping her.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $235.06 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 $369.22 per cwt to $375.71, compared with $373.45 to $379.73.
The USDA choice cutout Friday was down $0.95 per cwt at $362.27 while select was up $1.98 at $345.38. The choice/select spread narrowed to $16.89 from $19.82 with 140 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $430.88 per cwt, and 50% beef was $137.42.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.05 to $1.20 a bushel over the Dec corn contract, which settled at $4.19, down $0.02 3/4.
The CME Feeder Cattle Index for the seven days ended Thursday was $362.57 per cwt, up $0.94. This compares with Friday’s Oct contract settlement of $357.17, up $2.87.