Beef Buzz News
January Cattle on Feed Report Three Percent Under Year Ago- Derrell Peel Says Tighter Supplies Will Be Around for Awhile
Mon, 23 Jan 2023 05:15:02 CST
For the fourth month in a row- feedlot inventories fell in the January first USDA Cattle on Feed Report. Oklahoma Farm Report's Ron Hays talked with OSU Extension Livestock Market Economist Dr. Derrell Peel about the numbers, all of which were under year ago levels.
Ron Hays Beef Buzzes with Derrell Peel on Cattle on Feed Released January 20
USDA's on feed number as of January first was 97% of a year ago, the Decmber placements were 92% of a year ago and marketings were 94% of one year ago. Peel says that all of these numbers were very close to average pre report expectations.
Peel tells Hays "Last month I might have mentioned the December one inventory had an unusual month to month decrease that suggests that maybe November was an early seasonal peak in the feedlot inventories- normally we are peaking anywhere from January to March or April and it was at a lot lower level than a year ago. This January number is slightly above than the December level but not very much so it does suggest that we are putting in an earlier seasonal peak in these numbers- and that they are going to go on down from here- we simply don't have the cattle to support larger feedlot inventories in the forseeable future."
Peel also believes that the leverage that was controlled by the packers during the 2020 COVID has moved back up the pipeline- feedlot operators have had the ability to demand higher prices in recent months but that leverage is going to further slide all the way back to the primary production level- and that is the cow calf level. "the shortage of cattle will be reflected in calf prices and then everyone above them will is a margin operator and the margin operators are all gonna feel the squeeze."
Peel reminds us that this is a quarterly report- so it gives us a breakdown in steers and heifers on feed. "we did see a slight decrease in the number of heifers on feed- that's the first time in sixth quarters that we have had a year over year decrease of heifers on feed." He believes that suggests that we are getting close to ending the worse of the liquidation of heifers available for our beef cattle herds.
Click here for the complete Cattle on Feed report from USDA released on Friday, January 20, 2023.
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