The latest USDA Cattle on Feed report, released on Friday November 17th, shows that placements of cattle into feedlots was elevated above a year ago for the second straight month. But Oklahoma State University Extension Economist Dr. Derrell Peel says that this month- the market watchers were not blindsided and actually forecast a larger placement of cattle than what the USDA number shows.
Placements of cattle on feed rose less than forecast by analysts, with USDA reporting 2.16 million head through Nov. 1, which is 3.8% higher than this time last year. The uptick is less than expected by analysts, who were forecasting a 7% jump in placements.
The USDA reported fed cattle marketed for the month ended Nov. 1 totaled 1.76 million head, which is down 2.6% from last year’s total. This is a little more than forecast by analysts, who were calling for a 1.9% drop in marketings.
Total supplies of cattle on feedlots were 11.93 million head, which is 1.7% higher than this time a year ago, the USDA said in its monthly Cattle on Feed Report. Analysts surveyed prior to the report expected the inventories to rise 2.1% versus this time last year.
Oklahoma Farm Report’s Ron Hays talked with Dr. Peel shortly after the release of the report- who says that these numbers could be slightly friendly to the futures markets as they open back up for a holiday shortened Thanksgiving week on Monday.
Peel says it’s important to understand “none of these reports change the numbers- they don’t change the real fundamentals- what we are doing is changing the timing of things with both of these reports.” Peel adds What has become apparent over this last month after that surprising report in October is that producers are selling- they are selling into this market- it’s obviously a lot higher than a year ago even though we have had a significant correction in feeder cattle markets as well as fed cattle markets.”
Peel believes that enough producers have seen recent price levels and have decided marketing sooner rather than later is making sense for their operation. “They are taking advantage of this market- they are selling ahead- in some cases drought is playing into that a little bit but I think a lot of it is just marketing. People are just taking advantage of this and they are selling a lot of what they have to pocket some money here.”
Dr. Peel adds it will sometime in 2024 before the market incentives he believes will come will entice cattle producers to start holding back heifers and begin the long slow rebuild of the US Beef Cow Herd. For now- it’s take the calves to market and the check to the bank.
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