cattle in pasture JackieNix/iStock/Thinkstock

Drought likely contributes to increased cattle placements

Feedlots to see reduced demand for feeders into spring.

Oklahoma State University extension livestock marketing specialist Derrell Peel said drought conditions in the southern Plains likely contributed to larger-than-expected feedlot placements reported in the U.S. Department of Agriculture’s latest “Cattle on Feed” report.

USDA reported that cattle and calves on feed for the slaughter market in the U.S. for feedlots with capacity of 1,000 head or more totaled 11.6 million head on Feb. 1, 2018. This was an 8% increase from the same period in 2017 and was near the average pre-report estimate for a 7.4% increase.

Placements in feedlots during January totaled 2.07 million head, 4% above 2017. Trade analysts had expected only a 1% increase from the year prior. Net placements were 2.00 million head. During January, placements of cattle and calves were 375,000 head for those weighing less than 600 lb., 450,000 head for those weighing 600-699 lb., 625,000 head for those weighing 700-799 lb., 418,000 head for those weighing 800-899 lb., 115,000 head for those weighing 900-999 lb. and 85,000 head for those weighing 1,000 lb. and up.

Peel pointed out that Texas placements were up 11% year over year and that placements in Oklahoma were up 31% from last year. He also noted that feedlots placed 8.6% more cattle in the September-to-January period compared to the year before.

“Limited winter grazing numbers and early movement of wheat pasture cattle to feedlots means that little of the normal March run of wheat pasture cattle will be seen this year in the southern Plains,” he Peel explained. “Likewise, few cattle remain or are likely to be purchased for wheat graze-out.”

Early placement of feeders in the feedlots means that the short-term supply of feeder cattle outside of feedlots is tighter, as reflected in the year-over-year decrease in the estimated Jan. 1 feeder supply, he added. Despite the decrease, Peel said many of the lightweight feeders placed late in 2017 will remain in feedlots until mid-2018.

“Feedlots are pretty full and will have reduced demand for feeders for some time yet this spring; thus, the overall supply/demand balance may not have changed much,” he said.

Peel noted that larger feedlot placements in recent months represent a change in the timing of feedlot production but not a change in the overall supply situation.

“In general, while feedlots will not maintain the placement rate of recent months going forward, feeder cattle numbers will be larger in 2018, supporting increased cattle slaughter and beef production,” he said.

Marketings of fed cattle during January totaled 1.86 million head, 6% above 2017 but in line with trade expectations.

Other disappearance totaled 69,000 head during January, 30% above 2017.

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