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USDA report suggests cattle numbers to decline

Feedlot cows

The USDA’s most recent Cattle on Feed report indicated smaller inventory numbers are on the horizon.

Stephen Koontz, ag economist at Colorado State University, says lower placements were expected.

“Pre-report expectations anticipated that placements would be 96.2% of last year with a range of 91.8 to 99%,” he wrote in his “In the Cattle Markets” column.

“Actual placements during the month of September were 96.2% of the prior year at 2.080 million head. The futures market reacted sharply higher (the following) Monday, but the main strength in the up move was in the nearby as opposed to the deferred contracts. Dry weather, poor pasture in the southern plains, and specifically poor wheat pasture, have led to larger feeder cattle movements into feedyards earlier in the late summer and fall.”

Koontz says the market also anticipates that October-November placements will be less than what is typical seasonally.

“Both the intermediate and long-term outlook into next year is very optimistic,” he says.

The report indicated strong fed cattle marketings.

“Pre-report expectations anticipated that marketings would be 103.9% of last year with a range of 103.8 to 104.2%,” Koontz says. “Actual marketings during the month of February were inline and 104% percent of the prior year at 1.860 million head.

“The cattle feeding and meatpacking industries continue to move forward with substantial weekly and monthly marketings and slaughter. There has been a modest tightening of Saturday kills with working-day slaughter better than weekly averages of the past two years.”

He says the beef supply chain continues to be more functional.

‘The inventory of cattle on feed over 150 are down modestly with the normal seasonal decline, on feed over 120 days are down slightly more, and over 90 days are down the most,” Koontz says. “The inventory of animals appears heaviest for long-fed animals and animals just placed on feed. Further, the backlog that was created and persisted since the pandemic shutdowns looks to finally totally clear during the fourth quarter. This is bullish news for market outlook.”

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Jeff DeYoung is editor and livestock editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.

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