Author: David Anderson

It’s time for another USDA Cattle on Feed Report to be released on Friday, March 25^th.  The most interesting number in the report is going to be placements, e.g. the number of cattle placed on feed, in a feedlot with 1,000 head or more.  Market analysts expect placements to be well above a year ago, almost 10 percent more in some estimates.  Both USDA’s feeder cattle receipts data and the CME feeder cattle index data indicate more feeder cattle sales this February than last.  While feeder cattle imports from Mexico were down about 23,000 head during the month, imports from Canada were up about 29,000 head.  It’s also worth noting that placements in February, 2021 were relatively small.

Certainly, expanding drought is likely leading to increased placements.  Some profitable recent closeouts also help boost placements.  The war driven boost in corn and wheat prices occurred after the period for this report so placements were likely not driven by the events in Ukraine. 

Marketings, as related to fed cattle slaughter, were quite good during February.  They are expected to be up about 4.5 percent over last year.  Combining marketings and placements indicate that the number of cattle on feed will be a bit more than 1 percent larger than last year.  That will be close to the record large number of cattle on feed that was set in February. 

Anderson, David. “Another Big Placement Month“. Southern Ag Today 2(13.2). March 22, 2022. Permalink

War has contributed to cattle market uncertainty and sharply higher feed costs, record-high cattle on feed, and falling cutout values have hit heavy feeder prices hard.  But, cull cow prices have continued to skyrocket since the beginning of the year, shooting past $75 per cwt in the Southern Plains.  A year ago, 85-90% lean cull cows averaged about $46 per cwt.

Cow prices are increasing in spite of large cow slaughter.  Cow slaughter during the first two weeks of February totaled 145,000 head, or more, per week.  That is the largest weekly slaughter since December 2012.  Beef cow slaughter is extremely large, rivaling peak Fall slaughter levels.  This large beef cow slaughter is coinciding with seasonally large dairy cow slaughter, which typically peaks early in the year. 

High cow beef prices are providing some insight into beef demand.  Both the cow beef cutout and the wholesale 90 percent lean beef for ground beef are well above a year ago, at $229 and $284 per cwt, respectively.  But, wholesale middle meat prices have dropped in recent weeks with both wholesale ribeye and strip loin prices lower than last year.  Consumers may be shifting purchases to more ground beef and fewer steaks in response to high retail prices.

Increasing milk prices should slow dairy culling in the coming weeks.  Beef cow culling is going to be greatly influenced by drought and costs.  The rate of culling over the last year should have already moved older, less productive cows.  Reduced dairy culling should pull down total cow slaughter and support prices in the coming weeks.

Anderson, David. “Cull Cow Prices Skyrocket“. Southern Ag Today 2(12.2). March 15, 2022. Permalink

USDA’s February Cattle on Feed (COF) report will be released on Friday, February 25^th.  It’s expected to show a record number of cattle on feed in feedlots with 1,000 or more head.  The combination of fewer marketings than the year before and large placements should leave COF at 100.8 percent of the 12.106 million head on feed last February.  

Feedlot marketings should be about 2.7 percent below last year.  Given that there was one more slaughter day in January 2022 than 2021 that is a relatively low rate of daily average marketings.  Placements are expected to be about 98.9 percent of last year.  That would be a relatively large number of cattle placed.  Large placements could be driven by continued movement from drought-affected winter grazing and large sales from the Northern Plains.  Rising fed cattle prices likely encouraged placements also.  About 21,000 fewer feeder cattle were imported from Mexico in January 2022 than the year before, but about 9,000 more were imported from Canada. 

Large placements would indicate another month of pulling feeder cattle supplies forward.  While the result is more cattle on feed today, it also means fewer feeder cattle available later in the year.  The expected tighter supplies of calves and feeders are fueling optimism for much higher calf prices later this year.

Anderson, David. “Record High Cattle on Feed Expected“. Southern Ag Today 2(9.2). February 22, 2022. Permalink

Maybe we’re starting the new year on a high note with calf prices higher.  Lighter weight steer calves in the Southern Plains topped $200 per cwt at the end of 2021.  5-600 pound steers were over $180 and heavier feeders were over $160.  All of those prices were at least 10 percent higher than at the end of 2020.  Markets across the country were above a year ago along with those in the Southern Plains.

Expectations are for higher calf prices in 2022 than in 2021.  The continuing contraction in beef cow numbers means fewer calves for sale later in the year.  Tighter supplies combined with good demand means higher prices.

High feed costs will create some management choices this year.  Fine tuning fertilizer needs this year may pay off.  Targeting hay quality to cow needs could cut costs.  The area of the country in drought has been expanding across the South.  Some planning ahead for drought management strategies might include culling earlier, reviewing stocking rates, reserving some pasture for later needs, or even buying some feed ahead.  

On balance, the new year brings a bunch of reasons for optimism, in spite of higher costs.  The higher prices to start the year promises more to come later.  Best wishes to you in the new year!  

Anderson, David. “Calf Prices Start the New Year Higher“. Southern Ag Today 2(2.2). January 4, 2022. Permalink

Against a backdrop of rising cattle and calf prices and falling wholesale beef prices, USDA is to release the final Cattle on Feed report of the year on December 23^rd.  Cattle producers in the South are significant suppliers of feeder cattle throughout the Plains and Corn Belt.    

Both feedlot marketings and placements in November 2021 are expected to be about 4.5 percent larger than November 2020.  There was one more slaughter day this November implying slightly lower daily average marketings than last year.  If correct, these marketings would also be larger than in 2019.  While placements this year are expected to be larger than in 2020, if the estimates are correct, they would be fewer than in each November from 2017 to 2019.  Fewer feeder cattle were imported from Mexico during the month while slightly more were imported from Canada.  Placements in the expected range would follow the normal pattern of declining sharply from October’s placements.

The combination of marketings and placements leaves the number of cattle on feed slightly below last year.  On feed inventories typically increase from November to December and the December inventory is often the highest for the year.  December 2021 should be an exception to that with on-feed inventories in February being larger.  If the estimates are correct, this December would be the 6^th consecutive month with fewer cattle on feed than the year before.  

Merry Christmas!

Anderson, David. “More Cattle Placed and Marketed Expected.” Southern Ag Today 1(52.2). December 21, 2021. Permalink