Fourth-quarter cattle slaughter and beef production were projected to decrease year over year, but higher-than-expected beef production in the first three quarters of the year likely mean annual beef production will be steady or fractionally higher, said Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, in a letter to Extension agents called Cow-Calf Corner.
Feedlot production, cattle slaughter and beef production were expected to decrease sharply in 2023, Peel said.
ON-FEED INVENTORIES
The latest USDA Cattle on Feed report showed the Sep. 1 feedlot inventory at 11.279 million head, 100.4% of last year. Peel said. Feedlot inventories typically reach a seasonal low in August or September.
The September inventory was up 0.5% from August, indicating August was the 2022 low, he said. The August low was 975,000 head lower, down 8.0%, from the record on-feed inventory in February.
Feedlot inventories grow seasonally in the fall, but the increase this year was expected to be less than last year’s record levels, Peel said. August placements continued the trend of recent months of large placements of lightweight cattle with fewer heavy placements.
August placements were 100.4% of last year. From May through August, total placements were down 0.6% year over year with placements under 700 pounds up 5.3% and placements of more than 700 pounds down 3.7%.
Placements of lightweight cattle suggest fewer cattle available for placement going forward, Peel said.
PLACEMENTS CONSISTENT WITH FEEDER CATTLE DATA
Feedlot placement patterns this year were consistent with feeder cattle marketing data, he said. In Oklahoma, since July 1, the combined auction volume of feeder cattle has been 17.5% more than last year, but the percentage of the cattle that were more than 600 pounds was much less than normal.
And, Peel said the fall run of calves in October and November should be reduced.
August feedlot marketings were 106.4% of last year, he said, with daily average marketings 1.7% larger.
In the last four months, total marketings were up by 1.7% over the same period last year.
Feedlot inventories and cattle slaughter have remained stubbornly high this year, because of drought-forced movement of cattle off of pasture, Peel said. Total fed cattle slaughter thus far in 2022 was up 0.8% as the 1.7% decrease in steer slaughter for the year to date was offset by a 4.9% increase in heifer slaughter.
Total cow slaughter was up 5.6% so far this year, driven by a 13.4% increase year over year in beef cow slaughter, he said. Total cattle slaughter was up 1.8% year over year thus far in 2022, with female kills accounting for 50.9% of total cattle this year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $142.00 to $147.86 per cwt, compared with last week’s range of $141.00 to $145.00 FOB dressed steers, and heifers went for $222.00 to $227.22 per cwt, versus $221.34 to $227.23.
The USDA choice cutout Wednesday was down $0.88 per cwt at $247.55 while select was down $2.00 at $219.21. The choice/select spread widened to $28.34 from $27.22 with 131 loads of fabricated product and 34 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 $2.610 to $2.45 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.70 1/2, up $0.03.
The CME Feeder Cattle Index for the seven days ended Tuesday was $177.46 per cwt down $0.36. This compares with Wednesday’s Sep contract settlement of $175.37, down $0.32, and Oct’s $175.00, down $1.12.