Cattle on feed in large U.S. feedlots on July 1 were 4 percent higher than a year ago and the highest inventory since USDA National Agricultural Statistics Service began the on-feed series in 1996.
USDA’s report held no surprises. It continues the trend of 4 percent to 4.3 percent increases that have taken place the last three months, Derrell Peel, livestock marketing specialist with Oklahoma State University Extension, said.
“Marketings are also up, so it doesn’t really change the story at all,” he said.
“We’ve got more cattle, and we’re going to see more cattle — for 18 months anyway,” he said.
It’s an inevitable consequence of the herd expansion that began in 2014, he said.
“There’s not much you can do to avoid the supply increase. But there are things you can do to make it worse like delaying marketings,” he said.
That backs up cattle, leading to bigger supplies and heavier carcass weights. The combination results in an even bigger increase in beef production, he said.
June marketings of fed cattle going to slaughter were up 1 percent to more than 2 million head, and placements into feedlots were also up 1 percent to 1.8 million head.
Feedlots have stayed relatively current and are keeping carcass weights in check, although they’re up a bit, he said.
“They’re showing discipline in marketing more cattle through the system,” he said.
The supply of cattle that have been on feed more than 120 days is running some 28 percent ahead of last year’s pace, analysts with the Daily Livestock Report said on Monday.
“The large on-feed inventory and the large inventory of market-ready cattle should keep beef markets well supported in the short term. Marketings in August remain key and will be critical for cattle prices post Labor Day,” they said.
Good demand is absorbing the extra supply, and all markets through the production chain have done pretty good for the most part, Peel said.
Increased placements were no surprise, as it continued the trend of the previous 18 months. What is notable is the number of heifers in the feedlot mix over the last year, he said.
Heifers on feed on July 1 increased 8 percent over big numbers in July 2017, which were 11 percent higher than July 2016. A 13 percent increase was noted in October and those heifer numbers were up 16 percent in January and 14 percent in May, NASS reported.
“The number of heifers in feedlots has been really big. It’s one more indication that we are really slowing down heifer retention,” Peel said.