Feedlot inventory of cattle continues to swell

Friday, October 27, 2017

Counter-seasonally strong feeder cattle prices this fall indicate good demand despite growing feeder cattle supplies.

“The October Cattle on Feed report confirmed much of the demand came from feedlots,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.

September feedlot placements increased 13.5 percent year over year, more than many industry analysts expected ahead of the report. Marketings were up 2.9 percent over last year.

“Feedlot inventories for Oct. 1 were pushed higher by the large placements to 5.4 percent above year-ago levels,” Peel said. “At more than 10.8 million head, the October on-feed inventory is the largest October inventory since 2012. September placements were higher across all weight categories but largest in relative terms for the heaviest and lightest weight categories.”

Placements of animals weighing less than 600 pounds increased 17.4 percent year over year while placements of cattle weighing more than 800 pounds were up 14.4 percent compared to last year. Placements in the 600- and 700-pound categories increased 13.3 percent and 8.9 percent year over year, respectively.

Quarterly on-feed estimates in the October report showed the number of steers on-feed was up 1.6 percent year over year on October 1 while the inventory of heifers in feedlots increased 13 percent compared to one year ago.

“This indicates continued growth in heifers on feed as July 1 heifers on feed were up 10.6 percent year over year,” Peel said. “Heifer slaughter so far this year is consistent with these inventory totals – up 12 percent year over year – and suggests heifer slaughter will continue to increase for the foreseeable future.”

Still, the numbers suggest heifer retention, and likely herd growth, is slowing. However, the average ratio of steer-to-heifer slaughter, which peaked in 2016 and is adjusting downward, is still at levels not seen since 1975. Steer slaughter for the year-to-date is up 2.9 percent year over year.

Steer and heifer carcass weights continue to run well below last year with reported carcass weights for the most recent week as of this writing down 16 pounds for steers and down 15 pounds for heifers compared to the same time last year. Average fed carcass weights are down 14.6 pounds for the year to date.

“Average fed carcass weights are down due to lighter steer and heifer carcasses and a growing proportion of heifers to steers in the fed slaughter mix,” Peel said.

USDA reports total cattle slaughter up 5.8 percent year over year so far in 2017 with beef production up 4.2 percent for the year to date.

Cash receipts for cattle in Oklahoma exceed $3.7 billion annually, according to USDA National Agricultural Statistics Service data.