Senior Farm and Ranch Broadcaster Ron Hays talked to OSU Extension Livestock Market Economist Dr. Derrell Peel after the latest USDA Cattle of Feed Report was released on Friday afternoon, and Dr. Peel expects no significant market reaction from it.
January placements were up 2% from last year, marketings were up 1% from last year, and total on-feed numbers were down 8/10 of a percent.
“This report was pretty well anticipated,” Dr. Peel said. “There were no real surprises in it, so I don’t really anticipate any significant market reaction as a result of this report.”
While it is still too early to say, Dr. Peel has been anticipating cattle on-feed numbers to decline due to lower cattle numbers. January’s high prices brought cattle out of the countryside allowing feedlots to find the numbers they needed, but Peel believes that it is only a matter of time.
“The feeder cattle supply has only been tightening for several years and we have found various ways to, sort of, make them look like more cattle, but in fact, there really aren’t more cattle out there,” Dr. Peel said. “Feedlots have been placing fewer cattle on average as a general trend and they have offset that by slowing those cattle down moving through the feedlots. In the short run, that holds those inventories up, but you can only do that for so long.”
The wildcard remains when heifer retention will begin. Dr. Peel anticipates that if the availability of forage is there, heifer retention should begin soon which will further impact supplies for feedlots.
The extreme cold front last week caused a significant, but temporary, reduction in cattle movement and also likely caused some losses in the countryside for cow calf producers in Oklahoma and surrounding areas.
“The other part of it would be on the feedlot side,” Dr. Peel explained. “This cold weather will probably have some impacts on fed cattle performance and that will probably show up here in the coming weeks. I wouldn’t be surprised if we don’t see a little moderation on the carcass weights as a result of the impacts of this winter weather.”
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