The April “Cattle on Feed” report showed that the inventory for U.S. feedlots with a capacity of 1,000 head or more totaled 11.3 million head on April 1, 2020, a 5% decline from April 1, 2019. The number was in line with analysts’ expectations.

According to the survey, the inventory included 7.08 million steers and steer calves, down 5% from the previous year and accounting for 63 % of the total inventory, USDA reported. Heifers and heifer calves accounted for 4.22 million head, down 7% from 2019.

Placements in feedlots declined sharply during March, totaling 1.56 million head, 23% below 2019 and the lowest number of March placements since the series began in 1996. Analysts had expected a 20% decline.

USDA reported that net placements were 1.50 million head. During March, placements were: 310,000 head for cattle and calves weighing less than 600 lb., 220,000 head for those at 600-699 lb., 410,000 head for those at 700-799 lb., 402,000 head for those at 800-899 lb., 155,000 head for those at 900-999 lb. and 60,000 head for those weighing 1,000 lb. and heavier.

Marketings of fed cattle during March totaled 2.01 million head, 13% above 2019 and near the average pre-report trade estimate of 12%. USDA said marketings were the second highest for March since the series began in 1996.

Steiner Consulting Group (SCG) said in the “Daily Livestock Report” that the cattle on feed numbers confirmed what analysts were expecting: Faced with negative returns and the inability to put effective hedging in place, feedlots sharply reduced the number of cattle they placed on feed in March.

“This has the potential to create a marketing hole later in the summer and early fall. However, much will depend on the broader economic conditions and how quickly consumer demand will recover,” SCG explained.

Still, SCG said the report may be construed as supportive for August and October given that the decline in placements was bigger than expected.

“Already, market participants are focusing on an even bigger year-over-year decline in placements for April,” SCG said.