“Placements surprised the industry being very close to year-ago levels last week and pushed feedlot inventories up 2% over a year ago,” the Livestock Marketing Information Center said in an analysis. “This marks the fourth month of cattle on feed over 12 million head and a new record for the month of April.”

The placement information might be showing the impact of drought in the Western U.S.

“Placement data showed very high placements in some interesting areas, which could point to some early drought related movement in the West,” the LMIC said. “Arizona, California, Idaho, Nebraska and Washington all had placements above a year ago. The largest of the group was Washington, up 68%, and the smallest was Arizona, up 3% over last year.”

Analysts are also watching marketing trends, which dipped below year-ago levels, as well as how long cattle are remaining on feed.

“Marketings were down from a year ago by 2%, as daily average marketings slipped back below 90,000 head per day,” the LMIC said. “Cattle on feed over 120 days remains over 4.5 million head for the second month in a row and the highest level since April of 2021. Cattle on feed more than 90 days is in its third month of over 6.4 million head, also the highest since March 2021.”

The marketing center said placement levels by weight range could indicate what is coming down the road.

“Larger-than-expected placements in the 600-800 pound range indicates slaughter levels will be larger than originally forecast in the 6-8 month window from March, which likely means a slowdown by the first quarter in 2023,” the center said. “LMIC current forecasts show fourth quarter slaughter down 3.9% and first quarter of 2023 down 5.5%. The relationship between the two appears to still be correct, but numbers may shift around between these two quarters.”

The marketing center said the high cow slaughter rates should decline as well, impacting the overall numbers in feedlots.

“Very high cow slaughter is expected to drop off considerably from the prior year, which is muting the changes to the feedlot cattle flow as well,” the LMIC said.