The USDA’s May Cattle on Feed report showed increases that went beyond pre-report estimates. David P. Anderson, professor and economist for Texas A&M AgriLife Extension, said in his “In the Cattle Markets” column for the Livestock Marketing Information Center that digging deeper into the report shows an insightful look at the cattle supply situation, although he cautioned against comparing too much to the year before.
“Placements, marketings, and cattle on feed were reported up 127.2, 132.8, and 104.7%, respectively,” he said. “Placements and cattle on feed were higher than the average of the pre-report estimates, but it might not be worth much worry given the difficult comparisons to last year and the effects of rising feed costs and drought. It will likely lead to a little pressure on the board.”
Anderson said comparing to 2019 can help give some context, as well as looking at recent trends.
“A couple of things jump out when digging deeper into the report,” he said. “While the number of cattle on feed were up 4.7% over a year ago, they were down 0.7% from 2019. The decline in the number on feed from April 1 to May 1 was a little larger than average. Overall, supplies of fed cattle remain plentiful.”
Placements also showed a slight decline from 2019.
“While placements were up 27.2% from a year ago, they were 1.1% smaller than 2019,” Anderson said. “Looking longer term, placements during the first four months this year are 1.9% smaller than in 2019. Placements this early in the year largely reflect calves born last year and the 2020 estimated calf crop was 1.3% smaller than in 2019.”
Also, ongoing drought conditions in many parts of the country might be impacting the numbers, Anderson said.
“Lightweight placements were greater than a year ago, but what portion represent a comparison to last year and what were due to drought?” he said. “Compared to 2019, lightweight placements were up, but heavier placements were down. So, drought-forced placements are probably responsible for some of the increased lighter placements in the report.”
Anderson said overall there are plenty of cattle, even if supplies look to be declining.
“On balance, the report indicates plenty of cattle available in the coming months,” he said. “Taking a step back suggests that supplies are declining as indicated by the last several cattle inventory reports.”