Dr. Derrel Peel gives an Industry Snapshot: USDA Cattle Inventory and Cattle on Feed Reports
Oklahoma Farm Report
27 Jul 2020
Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel gives an Industry snap shot: USDA cattle inventory and cattle on feed reports
Last Friday USDA released the July Cattle on Feed report. Feedlot placements in June were 1.8 million head, 102.1 percent of last year. June marketings were 1.97 million head, up 1.3 percent year over year. Both placements and marketings were close to pre-report expectations and no major market reaction is expected. The July 1 on-feed inventory was 11.44 million head, very close to year ago levels. The report also provided quarterly information about steer and heifer inventories in feedlots on July 1. Steers were fractionally higher than last year while heifers on feed were down 1.5 percent year over year.
The industry is looking for a couple of pieces of information from this report. The first is an indication of the current status of feedlots relative to the backlog of fed cattle that developed in April and May. The calculated estimates of cattle on feed over 120 days is still very large compared to last year but the difference has decreased by some 160,000 head since May. It appears that the backlog is decreasing but a sizable number of cattle remain to be cleaned up before feedlots will be current. In the January – April period, feedlot placements were down just over million head year ove ryear
The cattle on feed report may also indicate some regional drought impacts. June placements were large year over year in both Texas and Colorado and both states showed an increase in placements under 700 pounds. In fact, the 8.8 percent year over year increase in placements under 700 pounds in the report is entirely accounted for by increased lightweight placements in Texas and Colorado.
USDA also released the July Cattle report providing a mid-year indication of cattle inventories and the 2020 calf crop. The report does not show any dramatic changes in the overall trajectory of the cattle industry at this point in the year. Interpretation of the numbers is a bit challenging because the continuing backlog of fed cattle must be accounted for in the numbers...