November 21, 2023
The timing of feeder cattle sales led to higher year-over-year November 1 inventories of cattle on feed despite tighter overall cattle supplies this year. Total cattle on feed was reported at 11.9 million head on November 1, which is 1.7% above a year ago.
This increase might seem at odds with the lower calf crop totals in recent years. However, the “larger-than” feedlot inventory months are likely to be short-lived as the backdrop to cattle markets continues to be herd liquidation and tight supplies.
Placements of cattle into feedlots during October 2023 totaled 2.2 million head, which was 3.8% above October 2022. This follows a 6.1% increase in cattle placed during September 2023 compared to a year ago. While higher than a year ago, placements in October were lower than the average of pre-report estimates. The increase was within the range of expectations, so this report is not a big surprise like the October 1 report was.
Similar to the larger September placements, there are a variety of reasons for the larger placements in October. Stronger market prices amid tough pasture conditions are likely the two largest drivers of more feeder cattle moving into feedlots during the past two months. When faced with the decision of whether to keep cattle longer (with limited feedstuffs availability in some regions like the southeast) or take advantage of the strong market prices, it appears many producers decided to sell or move cattle into feedlots a little earlier.
Despite the larger totals in September and October, placements during January through October 2023 are about 1% lower than the same period a year ago. The larger placements in recent months are likely to come at the expense of lower placements in future months.
Cattle auction market averages were mixed last week depending on location but were generally slightly lower. Cattle futures contracts were up $1 to $2 per CWT on Friday compared to the week before. In trading today, feeder cattle contracts were up about a dollar depending on contract month.
Source: Cattle Market News.
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