Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.8 million head on February 1, 2024.

Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel believes the February USDA Cattle on Feed Report is an indicator of smaller feedlot inventories ahead for the foreseeable future.

“So, this February cattle on feed report had placements in January, down about seven percent from a year ago. Marketing’s in January were just even with a year ago, and the that leaves us with an on-feed total for February 1 that’s just a smidge higher than a year ago. So, we’ll call it even, 100 percent of one year ago.” 

Dr. Peel says the report did come in as the trade expected- although the placement numbers were higher than the higher trade guess of 12 percent fewer placements than a year ago. The actual drop was seven percent.

“Starting last fall, we had three or four months of big placements that pulled the numbers back above year ago levels but that was a short term thing. I think that was a function of drought conditions and high market prices that encouraged people to sell. But the fact of the matter is the tighter numbers and the overall inventory situation says that these feedlot inventories are going to come down and we are starting to see that now.” 

Peel adds that we have arrived at a point where the feedlot numbers will tighten up.

“From my perspective, it’s been several months longer to get here than I thought. But I do think we are here now where we will continue to see these numbers tighten up appreciably, and I really expect to see these feedlot inventories operate below year earlier levels now for the foreseeable future. Going forward, we’re libel to pull these total feedlot inventories down, at least on an average basis probably another million plus head in the next few months.” 

Tight feedlot supplies ahead suggests that there will be incentives in the market for the rebuilding of the US beef cow herd. Peel believes interest will start picking up to add beef cows back into the herd here in 2024- assuming weather will allow adequate forage supplies to be available across the heart of cattle country.