Feedlots continue to aggressively market cattle, according to USDA’s Cattle on Feed report released Aug. 23.
Total on-feed numbers for feedlots with a capacity of 1,000 head or more came in at 11.1 million head, just above year-ago figures.
Brenda Boetel, an ag economist at the University of Wisconsin-River Falls, says pre-report estimates expected a 0.6% hike from August 2018.
July placements were down 2.2% from a year ago, totaling 1.71 million head. Boetel says analysts expected just a 0.5% decrease.
“Poor pasture and range conditions helped contribute to lighter placement numbers,” she writes in her In the Cattle Markets column.
According to the report, placements were up in just a handful of states, with California’s numbers increasing by 21% and Washington up by 3%.
Boetel says lightweight cattle placements were down 7.6% from a year ago, while placements for cattle weighing more than 800 pounds increased year-over-year only in California (21%), Washington (3%) and non-specified other states. Placements of cattle weighing less than 800 pounds were down 7.6%, while cattle weighing over 800 pounds saw placements increase 7.7%.
“Placements as a percentage of marketing was down 8% year-over-year from July 2018,” she says. “Seasonally, net feedlot placements as a percentage of marketings typically increases between June and October. Given that we have seen a decrease in this number, while the number of feeder cattle remains high indicates placements will be increasing at a faster rate later this fall.”
Marketings in July were aggressive, Boetel says. Marketings were up 6.4% over a year ago, a number in line with pre-report estimates. She adds there was one more marketing day in July than a year ago, which contributed to the higher number.
“Total cattle on feed inventory saw the largest July to August decline since 2008,” Boetel says. “Although cattle are currently being marketed in a timely manner, there is danger that this pace will slow and currentness will slip.”
“Given the decrease in slaughter capacity due to the Tyson fire, Saturday slaughter will need to continue to keep the market current. Keeping up with the increased supply in the fourth quarter will be a challenge.”
Boetel adds the announcement of a trade agreement with Japan last week has helped boost buyer support.