Beef Buzz News
Placements Slightly Higher But No Real Surprises in Derrell Peel's Review of USDA's On Feed Report
Mon, 29 Jan 2018 12:00:59 CST
On Friday, the United States Department of Agriculture released its first Cattle on Feed report for the year, based on January 1, 2018 numbers and Placements and Marketings made during this past December. Radio Oklahoma Ag Network Farm Director Ron Hays reached out to Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel for his reaction to this report, which he also detailed in his article for this week's Cow/Calf Corner newsletter.
"The January 1, 2018 inventory of cattle in feedlots was 11.49 million head, 108.3 percent of year earlier levels," Peel reported. "This is an increase of 884,000 head compared to January 1, 2017 and is the largest January on-feed total since 2012. For the twelve months of 2017, feedlot placements totaled 23.5 million head, up 1.91 million head (an 8.8 percent increase) from 2016. Total 2017 marketings increased 1.03 million head year over year, up 4.9 percent.
"December placements were up 0.8 percent year over year, slightly more than expected. This follows large year over year placement increases in September, October and November. December marketings were equal to expectations, down 1.4 percent from the previous year. December had one less business day compared to a year earlier, thus daily average marketings were still larger year over year as it was every month in 2017. In the last five months of 2017, feedlot placements exceeded marketings by 506,000 head. These additional cattle will be marketed in the first 4-6 months of 2018.
"December feedlot placements consisted of an unusual pattern of weights with increased year over year placements of feeders under 600 pounds and over 1000 pounds. Placements of typical weights from 600-900 pounds were down 4.7 percent year over year. Beginning in 2017, monthly cattle on feed reports now include more detail on placements of feeder cattle over 800 pounds; with data now showing 800-899, 900-999 and over 1000 pound placement categories. Over all twelve months of 2017, feedlot placements over 1000 pounds represented 4.3 percent of total placements; 900-999 pounds were 8.9 percent; and 800-899 pounds were 21.8 percent of total placements. The 700-799 pound weight group was the largest category at 24.9 percent. Placements of feeders from 600-699 pounds was 18.5 percent of the total placements while those under 600 pounds were 21.5 percent of the total. Placements under 600 pounds likely includes many dairy calves and seasonally some beef calves. Total placements of feeders under 600 pounds were up 11.4 percent in 2017 over 2016; including a 30 percent year over year jump in under 600 pound placements in November that was attributed to lack of wheat pasture in the Southern Plains.
"The latest cattle on feed report also included the breakdown of steers and heifers on feed. Steers on feed, January 1 were 7.34 million head, up 4.5 percent year over year. Heifers on feed were 4.15 million head, up 15.9 percent over one year ago. The number of steers on feed was the largest since 2008 while the number of heifers on feed was the largest since 2012. The heifer feedlot inventory swelled sharply in the last half of 2017 and indicates slowing heifer retention. However, it should be noted that the ratio of steer to heifer slaughter in 2017 was still well above long-term average levels meaning that growing heifer feedlot inventories relative to steers is really just getting back to more typical levels of heifer feeding after sharp reductions due to drought and herd expansion since 2012."
For a look at this report from USDA, click here.
Listen to Peel offer his full analysis of the report to Hays and the implications it will have on cattle markets in the near future, on today's Beef Buzz.
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