No signs of cattle herd expansion and tighter supplies were the takeaways from USDA’s latest “Cattle on Feed” report. Released on Friday, the report showed feedlots with capacity of 1,000 or more head totaled 11.0 million head on August 1, 2023, 2% below August 1, 2022. While this number was in line with the pre-report average estimate, it was the placements number that surprised the trade. July feedlot placements were lower than expected at 1.62 million head, 8% below 2022. Analysts had expected only a 5% decline from year-ago levels.

USDA livestock economist Shayle Shagam says, “We are talking about a small pool of cattle outside feedlots, so the number outside of feedlots on July 1 was down about 4%. To some extent, that’s going to be reflected in the fact that producer’s placed fewer cattle.”

Fed cattle marketings came in as expected, totaling 1.73 million head, 5% below August 2022.

USDA’s Gary Crawford says the herd contraction seems to continue “despite some very high prices for cattle, both feeder and fed cattle.”

Expansion hinges on forage

Shagam noted that expansion really boils down to grass and whether cow-calf producers have the forage to carry their animals over the winter for breeding in the spring. As dryness continues to expand in many parts of the country, expansion may move further out of reach. As of Aug. 15, USDA reports that 34% of the U.S. cattle inventory is being affected by drought.