In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with Oklahoma State University livestock market economist Dr. Derrell Peel about the latest USDA January Cattle on Feed report and what the numbers are signaling for the cattle industry. Peel says the report largely matched expectations, noting that January 1 cattle on feed came in at 96.8% of last year, with December placements at 94.6% and marketings at 101.8% year over year.
Peel emphasized that the report was not a surprise to the market. “I don’t think you can consider this to be a surprise at all for, you know, in any respect,” he said, adding that while placements were on the higher end of estimates, many analysts anticipated numbers of this size. Overall, the data aligned closely with pre-report guesses from industry experts.
One of the most notable takeaways, according to Peel, is the continued decline in feedlot inventories. “This makes the 14th consecutive month of year-over-year decreases in that cattle on feed inventory,” he explained. Peel noted that the drawdown is accelerating, as lower numbers are stacking on top of already reduced inventories from prior years, reflecting increasingly tight feeder cattle supplies.
When it comes to marketings and heifer data, Peel urged caution in reading too much into month-to-month changes. He said the slightly higher marketing number was “just a monthly kind of variation” and not a long-term trend. Looking at heifers, Peel pointed out that while heifers on feed were down numerically, their share of total cattle on feed actually increased slightly to about 38.7%, remaining above the long-term average. “We just have not seen that number fall,” he said, suggesting limited signs of herd rebuilding so far.
Peel concluded that the report reinforces what has been developing for some time across the industry. “We’re sort of reaching the end of the ability” for feedlots to maintain inventories despite fewer feeder cattle, he said. With feeder supplies “really tight out in the country,” Peel expects feedlot inventories to decline more rapidly in the coming months as the impact of tighter supplies becomes increasingly evident.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
