Producers in Driver's Seat
Don't Let Record-High Cattle on Feed Fool You
By Victoria G Myers, Progressive Farmer/DTN
News of continued high inventory numbers for cattle on feed was enough to fuel some bearish talk among livestock analysts last week. But producers shouldn't let that spur them to underprice feeders, as time is on their side.
Here's what the numbers say. Cattle on feed inventory for September came in at 11.234 million head, the second-highest on record...
... Peel said the large number of heavy placements would "front-end load future production."
COW-CALF PRODUCERS IN A GOOD PLACE
Corbitt Wall, livestock market specialist with DVAuction out of Texas, told DTN the more analysts looked at those cattle on feed inventory numbers last week the more bearish they appeared. But he believes a lot of what the industry is seeing is really a function of people being fearful about feed costs late fall into winter.
"A lot of those cattle were in backgrounding operations," he said. "They were already on feed, just not in a big feedyard, which is what the report follows. So, a lot of these cattle were likely being fed a concentrated ration, they were also being held on grass for cheap gains as long as possible. It's those cattle that added to this number, and that's why we saw so many heavy placements."
While analysts dissect the numbers and wait for the next data drop, Wall says cow-calf producers need to keep their eyes on the prize.
"The reality of this is that we're short on cattle, and numbers are dwindling quickly...