The 12-month moving average of feedlot inventories decreased this month for the first time since October 2021, suggesting temporary influences like drought may have run their course, which will lead to decreasing feedlot totals and reduced marketings going forward, said Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, in a letter to Extension agents called Cow-Calf Corner.
The October report showed the first monthly decrease in the monthly on-feed inventory since Dec. 2021, pegging the Oct. 1 inventory at 11.449 million head, down 0.9% year over year, Peel said. Among the largest feedlot states, on-feed totals in Texas and Nebraska remained higher year over year, up 3.3% and 3.8%, respectively, while feedlot totals were down 6.7% in Kansas and 5.3% in Colorado.
CONTINUED LIQUIDATION
The quarterly breakdown of steers and heifers showed the number of steers on feed was down 2.3% from last year while the number of heifers wad up 1.4%, he said. The number of heifers on feed indicates continued liquidation of the cattle herd with heifers on feed representing 39.7% of total feedlot inventories, the highest percentage since October 2001.
The number of heifers on feed in Texas was up 13.1% year over year, giving Texas an unusually large share of total heifers on feed and the highest Texas total since 2001, Peel said. This was consistent with the severe drought conditions in the southern plains this year.
September feedlot placements were 96.2% of last year, and the 3.8% decrease was the largest monthly placement decrease since July 2021, he said. Placements from 600 to 900 pounds were down 7.6% year over year with placements under 600 pounds up 2.3% and placements over 900 pounds up 2.7.
September feedlot placements were lower in Texas (down 8.9%), Kansas, down 11.9% and Colorado, down 4.5% from last year, Peel said. However, placements in Nebraska were up 8.3% year over year.
MARKETINGS UP
September feedlot marketings were up 4.0% year over year with increased marketings in Nebraska, up 10.3%, and Kansas, up 4.6%, and Colorado unchanged from last year, he said. Marketings from Texas feedlots were down 1.2%. Total feedlot marketings in the past six months averaged 1.4% higher year over year.
2022 fed cattle slaughter has averaged 0.9% higher than 2021, with steer slaughter down 1.6% and heifer slaughter up 5.0%, Peel said. Packer labor issues appear to have improved as average daily (Monday-Friday) fed slaughter totals have increased 3.5% year over year.
Daily fed slaughter reached 100,212 head on May 17, topping 100,000 head for the first time since December 2013, he said. Daily fed slaughter has exceeded 100,000 head twelve times this year. And average Saturday fed slaughter is down 24.8% year over year in 2022.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $150.00 to $154.40 per cwt, compared with last week’s range of $145.28 to $153.00. FOB dressed steers, and heifers went for $233.15 to $238.56 per cwt, versus $228.72 to $239.18.
The USDA choice cutout Wednesday was up $0.84 per cwt at $263.47 while select was up $0.43 at $233.16. The choice/select spread widened to $30.31 from $29.90 with 117 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $2.15 to $2.25 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.87 1/2, down 10 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $177.29 per cwt up $0.32. This compares with Wednesday’s Nov contract settlement of $178.92, up $0.02.