Feedlot inventories continue to climb, according to the May 25 Cattle on Feed Report.
The USDA says feedlot numbers were up 5.1 percent from a year ago, for a total of 11.6 million head in feedlots with a capacity of 1,000 head or more.
That number comes along with declining placement numbers, according to an analysis by the Livestock Marketing Information Center. The report indicated placements were down 8 percent from a year ago, while marketings were up 6 percent.
“Year-over-year increases in the on-feed count have been in place since early 2016, and the percentage increase surged beginning in late 2017 as a result of more animals placed into feedlots, largely due to drought,” the center says.
Fed cattle marketings are usually the strongest in May and June, and the LMIC expects that to be the case in 2018.
“The recent trend of declines in animals placed into feedlots suggests that the number of animals in feedlots will decline seasonally until September,” the center said. “Importantly, the percentage increase compared to 2017’s is projected to continue dropping through the summer months. This year, the seasonal drop could be larger than normal. By Sept. 1, 2018, the number of cattle on feed could be only 1 to 3 percent above 2017’s.”
There is good news for the dairy industry as butter and cheese usage jumped over the first quarter of 2018, according to the LMIC.
“The first quarter of 2018 saw American-type cheese usage increase by a rather dramatic 8.6 percent compared to 2017’s,” the LMIC says in its analysis. “Meanwhile, non-American-type cheese (mostly Italian varieties) usage was up 3.6 percent year-over-year for the just-completed quarter, and compared to 2016 usage was unchanged. Butter domestic usage for the first quarter was up 5.1 percent from a year earlier.”
Support has also come from the export market, with American-type cheese exports up 44 percent over the first quarter.
“That might be sensational if not for the fact that exports only account for 3 percent of American- type cheese production,” the LMIC says.
“Still, the increase was a factor limiting the gains in American-type cheese cold storage holdings during recent months. Non-fat dry milk exports during the first quarter were up 23 percent from a year earlier. Milk powder production during the first quarter increased 3 percent.”