Heifer Feeding Near Record High

The quarterly count of heifers on feed from the monthly USDA Cattle on Feed report shows feedlots are nearly as full of heifers as they have been since the data breakout began in 2010.

In addition to the count of cattle populating US feedlots as of the first of the month, the USDA report adds a quarterly breakout of the number of heifers in the feedlots.  Friday’s report said 38.839% of the total feedlot population were heifers, up from 38.831% the previous quarter.

Only two other quarters since then have had a higher percentage of heifers on feed than were shown in Friday’s Cattle on Feed report.  These were the last two quarters of 2019 when the third quarter had 38.937% and the last quarter had 39.157%.

 

IMPLICATIONS OF AGGRESSIVE HEIFER FEEDING

 

The implications of having a comparatively large percentage of cattle on feed being heifers are that cattle producers are decreasing the total herd size, a market analyst said.

Drought has devastated pastures and rangeland in the western half of the contiguous 48 states, forcing many cow/calf producers to sell heifers they had hoped to replace aging cows being culled from their herds, the analyst said.  Many also were reportedly selling cows still in their productive lifespans because there was no grass or water.

High wheat prices also were said to be influencing decisions against grazing winter wheat this season because of the loss of grain production.  Well-managed grazing will not ruin a wheat crop’s eventual production, but it can harm it, and any yield loss may be more than the gain from grazing calves over the winter.

With loss of winter wheat and pasture grazing, and no herd to join, the heifers are going to the feedlots, the analyst said.

 

GOING FORWARD

 

And if those heifers are headed for the packing plant, the total herd has a low percentage chance of rebuilding quickly once the economics and pastures return to more favorable conditions for the cow/calf producer, the analyst said.

But when the tide turns in favor of the cow/calf producer, heifer prices likely will move much higher quickly, the analyst said.  And, deprived of all those heifers in the feeder cattle mix, the overall price of feeder cattle likely will rise as well.

The high percentage of heifers in the feedlot mix may not last long, the analyst said.  It would be unusual for the total herd to be able to sustain.  But the longer feedlots maintain a high percentage of heifers on feed, the fewer heifers will be available down the road.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $136.74 to $139.41 per cwt, compared with last week’s range of $137.18 to $141.00.  FOB dressed steers and heifers went for $214.03 to $216.17 per cwt, versus $212.87 to $216.93.

The USDA choice cutout Tuesday was down $1.12 per cwt at $292.38, while select was off $1.47 at $283.32.  The choice/select spread widened to $9.06 from $8.71 with 109 loads of fabricated product and 34 loads of trimmings and grinds sold into the spot market.

The USDA reported that basis bids for corn from feeders in the Southern Plains were steady at $1.40 to $1.65 a bushel over the Mar futures and for southwest Kansas were unchanged at $0.35 over Mar, which settled at $6.20 a bushel, down $0.01.

The CME Feeder Cattle Index for the seven days ended Monday was $159.77 per cwt down $0.69.  This compares with Tuesday’s Jan contract settlement of $158.55 per cwt, up $0.07.