Senior Farm and Ranch Broadcaster Ron Hays talked to OSU Extension Livestock Market Economist Dr. Derrell Peel after the latest USDA Cattle-on-Feed Report was released on Thursday afternoon, and Dr. Peel analyzed the latest numbers.
According to the April Cattle on Feed Report, March placements were up 105% of last year, and March marketings were up 101% of last year. The total on feed number as of April 1 was 2% down from a year ago, similar to last month.
“The placement number was a little bigger than expected, but it wasn’t outside of the range of expectations, so not a huge surprise, but maybe a little bit bigger,” Dr. Peel detailed. “Markets were pretty close to expected. The on-feed number didn’t really drop further on a year-over-year basis, but we’re maintaining a little bit smaller inventory than we’ve had over the last year or more.”
He expects the inventory to constrict even more as time goes on, simply due to fewer cattle in the countryside. He referred to the “tricks” feedyards have employed to maintain capacity for as long as possible, but even they have limits.
Placements were down sharply in the last report, causing a ripple in the markets. “As we watch the auction volumes through the month of March, they were bigger,” Dr. Peel said. “Some of it was kind of weather-timing, we had some weather impacts in February that reduced placements. Some of those showed up later in March, WEr so I wasn’t overly surprised that it came in a little bigger than the average trade guess, but again, it wasn’t outside the range of expectations.
Because the April publication includes the quarterly report, it provides more in-depth information about females. “That was the most interesting number I wanted to see,” Dr. Peel said, referring to the heifer on feed number. “This heifer on feed number comes in at 37.6 percent of the total feedlot inventory in several quarters,” Dr. Peel said. “For at least two years, if not longer, this is the lowest heifer percentage on feed. It brings that percentage down to about the long-term average level or maybe just a little bit above it.”
The number still isn’t low enough yet to suggest herd rebuilding has begun on a large scale, but Dr. Peel believes it is indicative of a step in that direction.
“If we confirm this in the next quarter for sure, then we can safely say that we might be doing some heifer retention that will eventually lead to herd rebuilding,” he added. “You have to start somewhere, and this could be that start.”
Longer-term forage conditions will dictate whether or not the trend will continue and spread. A statewide significant rain event is in the forecast for Oklahoma, and Dr. Peel said that the timing is prime. “We are at a time now where the next six or eight weeks is really going to set the stage for forage conditions for much of the growing season.”
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