On Jan. 1, the total feedlot inventory represented a record of 16.5% of the All Cattle and Calves inventory in the country, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
However, decreased cattle numbers and herd rebuilding inevitably will lead to smaller feedlot inventories in the coming months, Peel said.
PLACEMENTS EXCEED EXPECTATIONS
The March Cattle on Feed report showed February placements at 109.6% of one year earlier, Peel said. Placements were anticipated to be higher, but the total was slightly above average pre-report expectations.
February feedlot marketings were 103.4% of last year, close to expectations, he said. February had an extra day because of leap year, which accounts for some of the February increases. But some of the increased placements also was from weather disruptions in January that delayed cattle movements.
In fact, combined January and February placements were up just 0.6% year over year, Peel said.
STUBBORN INVENTORIES
The March 1 feedlot inventory was 11.838 million head, up 1.3% compared with 2023, he said. Feedlot inventories have been stubbornly slow to adjust downward compared to cattle inventories generally.
The US calf crop since 2018, the largest in the last decade, has decreased by 7.5% to 2023, Peel said. This is a total reduction in calf production of 2.72 million head in that six-year period.
The 2024 calf crop is expected to be lower still with a smaller beef cow herd coming into this year, he said. The calculated feeder supply on Jan. 1 was the lowest in data available back to 1972.
However, feedlot inventories have remained relatively large despite declining cattle numbers, Peel said. The total US cattle on feed inventory on Jan. 1 actually was higher than the total cattle on feed on Jan. 1, 2019, following the peak calf crop.
Feed inventories continued to climb until 2022, he said. The Jan. 1, 2024, feedlot inventory was down just 1.8% from the 2022 peak.
RINSE AND REPEAT
The monthly cattle on feed reports tell the same story, Peel said. Average monthly feedlot inventories continued to climb until the September 2022 peak of 11.836 million head.
The 12-month moving average of monthly feedlot inventories declined from October 2022–October 2023 before increasing to the current level of 11.62 million head in March 2024, down 1.8% from the peak, he said. Recent increases in feedlot inventories are from short-run changes in timing of cattle, i.e. pulling cattle ahead, but are not sustainable given the smaller overall cattle supplies.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $188.79 per cwt to $194.57, compared with last week’s range of $185.74 to $192.95 per cwt. FOB dressed steers, and heifers went for $294.13 per cwt to $302.18, compared with $290.20 to $299.32.
The USDA choice cutout Thursday was down $0.22 per cwt at $308.36 while select was down $2.74 at $301.17. The choice/select spread narrowed to $7.19 from $10.15 with 111 loads of fabricated product and 38 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $335.67 per cwt, and 50% beef was $102.46.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.40 to $1.55 a bushel over the May corn contract, which settled at $4.42 a bushel, up $0.15 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $248.99 per cwt, down $2.24. This compares with Thursday’s Mar contract settlement of $247.75, down $0.30, and Apr’s $247.12, up $0.25.