The latest USDA Cattle on Feed report pegged May 1 feedlot inventories at 11.554 million head, down 0.9% from a year earlier, said Derrell Peel, Oklahoma State University agricultural economist, in a letter called In The Cattle Markets.
That was the first year-over-year-decrease in feedlot inventories in eight months. Peel said. Feedlots typically see a consistent seasonal pattern in inventories with peaks in the November to February period and summer lows in July through September.
The average seasonal decrease from peak to trough has averaged just under 900,000 head in the past five years, he said. The May 1 inventory was down 462,000 head from the recent December 2023 peak.
Many expect feedlot inventories to decrease seasonally for another three months or so, but the more important unknown may be the extent to which feedlot inventories will increase for the next seasonal peak, Peel said.
TOP FEEDING STATES DOWN
The top four cattle feeding states all have May 1 inventories lower year over year, he said. Texas had the largest inventory at 2.77 million head, down 0.7% from last year.
Nebraska was number two with an inventory of 2.51 million, down 1.2% year over year, Peel said. Kansas was the third largest cattle feeding state with a May 1 inventory of 2.30 million head, down 5.7% from one year ago.
Colorado was number four with 0.950 million head, down 3.1% year over year, he said.
The top four feedlot states represented 73.8% of total inventories in feedlots with 1,000 head or more of capacity, Peel said. Other cattle feeding states, in descending order, included Iowa, California, Idaho, Oklahoma, Arizona, South Dakota and Washington.
In the first four months of 2024, total placements were down 4.3%, with placements weighing less than 800 pounds down 6.7%m he said. Placements weighing 800 pounds or more were unchanged.
SLUGGISH MARKETINGS PUSH OUT-WEIGHTS
April marketings were 1.872 million head, up 10.1%, Peel said. April had two more business days than last year, so daily average April marketings were about equal to April 2023.
The slow pace of marketings continues to push fed cattle weights higher, he said. The latest weekly data shows steer carcass weights at 923 pounds, up 32 from a year ago, and heifer carcass weights at 848 pounds, up 28 pounds.
Increased carcass weights were partially offsetting reduced slaughter and keeping beef production high, Peel said.
For the first 19 weeks of the year, beef production was down 2.1% year over year, Peel said. Forecasts called for 2024 beef production to be down nearly 5%, but those forecasts have been revised upward to a smaller year-over-year decrease in beef production.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $186.00 per cwt to $191.52, compared with last week’s range of $186.66 to $192.34 per cwt. FOB dressed steers, and heifers went for $291.58 per cwt to $299.90, compared with $293.35 to $302.05.
The USDA choice cutout Thursday was up $1.42 per cwt at $316.21 while select was off $0.07 at $300.83. The choice/select spread widened to $15.38 from $13.89 with 108 loads of fabricated product and 14 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $358.81 per cwt, and 50% beef was $84.37.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.42 to $1.52 a bushel over the Jul corn contract, which settled at $4.52 a bushel, up $0.12 3/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $250.54 per cwt, down $0.32. This compares with Thursday’s Aug contract settlement of $252.85, down $1.97.