While there were no great surprises in either the USDA Cattle on Feed or the mid-year Cattle (inventory) reports there were a few items of interest that, taken together, might suggest the cattle herd has been a little overestimated the last couple of years.
Texas A&M Extension Economist David Anderson said so in a letter to Extension agents through the Livestock Marketing Information Center’s In The Cattle Markets.
HEADLINE NUMBERS
First the headline numbers. Placements were down 2.3% from June, 2018, Anderson said. Marketings also were below the year before, down 3.1%.
Given one less working day in the month, average marketings were up almost 2,000 head a day, and they have been above a year ago every day this week, he said. The combination of comings and goings left the number of cattle on feed up 1.7%.
The 11.485 million head on feed is the most for a July 1 in the data, which began in this form in the mid-1990s, Anderson said.
Placements again were skewed toward heavier feeders, Anderson pointed out. The number placed weighing more than 700 pounds increased slightly from a year ago, about 23,000 head.
Lighter weight feeders, under 700 pounds, were down 65,000 head, or 8.7%, from a year ago, he said. While this might be attributed to higher feed prices and excellent range and pasture conditions, heavier weight placements have exceeded the year before every month this year, except January.
Particularly interesting was the breakout of steers and heifers on feed, Anderson said. For the third straight quarter, the number of steers on feed was below the year before, down 120,000 head, or 1.7%.
The number of heifers was up 7.7% from last year, which brings in the inventory report, he said.
CATTLE (INVENTORY) REPORT SHOWS HERD SIZES TOPPING
The report indicated no change in the beef cow herd compared to a year, which was about what was expected, Anderson said. Fewer replacements were held back, so the herd has about topped out for this cycle.
The report also estimated a smaller calf crop than the year before. Anderson said this, combined with steer slaughter below a year ago, fewer steers on feed and elevated cow and heifer slaughter indicate the data is supporting a lot of anecdotal reports over the last couple of years of reproductive problems.
Reports of reproductive problems often have been attributed to extreme weather events but also to some uncertain factors, he said. This combination of data might also suggest that the calf crop, or maybe even the cow herd, has been slightly overestimated the last couple of years.
But, marketings continue to move with no expectations of backed-up cattle indicated, he said. There are a lot of cattle on feed, but this is pretty normal at the peak of the cycle.
CATTLE, BEEF RECAP
Cash cattle traded in the Plains last week at $111 to $114.50 per cwt on a live basis, steady to down $0.50 from the previous week. Dressed-basis trading was reported at a steady $182 to $185.
The USDA choice cutout Wednesday was down $0.18 per cwt at $213.60, while select was off $0.29 at $189.42. The choice/select spread widened to $24.18 from $24.07 with 88 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday was $136.71 per cwt, down $0.23 from the previous day. This compares with Wednesday’s Aug contract settlement of $142.82, up $0.62.