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cattle at feed bunk Tyler Olson/Hemera/Thinkstock

U.S. feedlot inventories mostly neutral

Cattle prices likely to be pressured in early 2020 by large numbers of market-ready cattle in feedlots.

Cattle in U.S. feedlots with a capacity of 1,000 head or more totaled 11.9 million head on Feb. 1, 2020, according to the U.S. Department of Agriculture’s latest “Cattle on Feed” report. The inventory was 2% above Feb. 1, 2019, and close to the trade estimate of 2.4%. It was also the highest February total since 2008.

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Placements in feedlots during January totaled 1.96 million head, 1% below 2019. The trade had expected a 1.4% increase. Oklahoma State University Extension livestock marketing specialist Derrell Peel said that since the placement number was smaller than expected, it will be viewed as somewhat bullish. 

Net placements were 1.90 million head. During January, placements of cattle and calves weighing less than 600 lb. were 390,000 head, 600-699 lb. were 455,000 head, 700-799 lb. were 535,000 head, 800-899 lb. were 400,000 head, 900-999 lb. were 105,000 head and 1,000 lb. and greater were 70,000 head.

Marketings of fed cattle during January totaled 1.93 million head, 1% above 2019 and in line with trade estimates.

In the “Daily Livestock Report,” Steiner Consulting Group (SGC) said pragmatically, the report overall was neutral compared to pre-report estimates.

USDA also reported that cattle and calves in feedlots with a capacity of 1,000 head or more represented 81.5% of all cattle and calves on feed on Jan. 1, 2020. This is comparable to 81.3% on Jan. 1, 2019.

Marketings of fed cattle for feedlots with capacity of 1,000 head or more during 2019 represented 87% of total cattle marketed from all feedlots in the U.S., down slightly from 87.1% during 2018.

2020 price forecast slightly higher

Last week, USDA released its “Livestock & Poultry Outlook” report, forecasting the five-area steer price for 2020 to average $117/cwt., close to the 2019 average of $116.78/cwt.

“Cattle prices will likely be pressured in the early part of the year by large numbers of market-ready cattle in feedlots, but even as marketings decline later in the year, increased supplies of pork and broiler meat are expected to keep pressure on beef prices,” the agency noted.

Additionally, USDA said cow/calf operators and backgrounders will likely see higher prices during 2020 as feeder cattle supplies tighten. USDA is forecasting feeder steer prices in 2020 to average $146/cwt., compared to $142.23/cwt. in 2019.

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