Analysts are watching trends in feeding cattle, including the recent decline in average days of feed, to see how that might impact cattle markets.
“The September Kansas State University Focus on Feedlots data has been showing a steady decline in average days on feed, with both steers and heifers below a year ago for the last four months,” the Livestock Marketing Information Center said. “In September, the average days on feed for steers was 159 days compared to 175 last year and 165 for the five-year average (2015-19). Similarly, heifers were 169 average days on feed versus 176 a year ago and 160 for the five-year average.”
Despite these numbers, the number of cattle on feed over 120 days was up from last year and the average of the last five years.
“Although average days on feed is lower, feedlots show cattle on feed over 120 days in October was up 3.3% from last year and 7.6% above the five-year average,” the center said.
Analysts are also watching cost of gain trends.
“Since the start of the year, average cost of gain for steers has risen 32.8% ($27) while heifers have increased 37.2% ($32),” the center said. “Average cost of gain in September was $109.29 and $118.34 per cwt., respectively, for steers and heifers, the highest in about eight years. It is also worth noting that the KSU Feedlot average cost of gain data does not include the cost of feeder, yardage and interest costs.”
This increase in cost of gain was largely tied to corn and alfalfa feed costs.
“Higher average cost of gain is primarily due to rising feed costs for corn, up 47.7% ($2.25) and ground alfalfa hay, up 31.2% ($43) since the start of the year,” the center said. “The higher cost of gain will also motivate cattle feeders to market cattle quicker.”
The USDA Cattle on Feed report as of Oct. 1 reported 11.55 million head on feed, the second highest level behind October 2020’s record of 11.72 million head. Heifers are accounting for a larger percentage of the cattle on feed compared to last year.
“The higher number of heifers on feed is likely caused by ongoing drought in the western U.S.,” the center said. “Persistent drought has limited available feed supplies which is likely causing some producers to divert heifers away from breeding and into feedlots.”