Cattle on Feed Inventory Higher Despite Tighter Supplies

By Andi Anderson

Cattle on feed inventory was reported at 11.9 million head on November 1, 1.7% higher than a year ago. This increase might seem at odds with the lower calf crop totals in recent years. However, the “larger-than-expected” 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.

There are a variety of reasons for the larger placements in September and 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.

The ongoing cattle on feed inventory situation highlights the dynamic nature of the cattle market and the influence of various factors on supply and demand. While current inventory levels may seem surprising given tighter cattle supplies, the timing of feeder cattle sales and market conditions have played a significant role.
 

Photo Credit: istock-123ducu