What are some of the trends associated with this month’s Agriculture Department Cattle on Feed report? USDA Livestock Analyst Michael McConnell starts by providing the numbers from the June report.
“11.68 million head of cattle on feedlots with a capacity larger than a thousand head. That was 2% higher than this time last year. There was 1.7 million head of cattle placed in feedlots during May. That was 10% lower than a year ago. And 1.55 million head of cattle that were marketed out of feedlots. That was 12% lower than a year ago.”
Regarding analysis of the numbers, McConnell starts with this.
“We still have more cattle in feedlots than we did a year ago. A lot of that is coming, though, just because we have relatively slower flows going into and out of feedlots.”
Turning to the placement side of cattle in feedlots:
“It has improved a little bit from a month ago and over the past couple of weeks, particularly in the southeast part of the country. But overall, hey, cattle supplies was what’s driving the day in the sense of your animals out there, and they’re much pricier than have been in past years. That’s encouraging a lot of cow-calf operators to, I think, keep their animals on pasture.”
Yet, the cattle says, at the end of the day:
“One positive thing that we’ve seen is that while we still have some drought conditions in many parts of the country, including many important cow-calf regions in the country, it has improved a little bit from a month ago and over the past couple of weeks, particularly in the southeast part of the country. Some improvement may be lessening some of the urgency to place animals that are on pasture right now and provide some more runway and some additional time for animals to stay on pasture rather than being placed in feedlots.”
And as for marketing numbers and what they may indicate:
“The past several weeks and months, we’ve seen slaughter rates can be pretty sluggish relative to their typical seasonal pattern. A lot of that stems from the fact that there’s still overall pretty difficult margins, particularly for packers, as we see relatively high wholesale beef prices, but also increasing fed steer prices as well and then fed cattle price as well, and so that has been discouraging some of the production rates over the past several weeks.”