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Cattle on Feed - Lower Placements Signal Tighter Supplies

Cattle on Feed - Lower Placements Signal Tighter Supplies


The latest Cattle on Feed Report from the USDA's National Agricultural Statistics Service (NASS) shows that placements into feedlots with 1,000 or more head capacity totaled 1.62 million head in July, down 8.3% from a year ago. This is the lowest monthly placement total since July 2017.

Marketings were also down 5.3% from a year ago, to 1.727 million head. As of August 1st, the cattle on feed estimate was 11.03 million head, down 2.3% from August 1, 2022.

The decline in placements is likely due to a number of factors, including the ongoing drought in some parts of the country, which has made it difficult for ranchers to feed their cattle. The high cost of feed is also a factor, as it has made it less profitable for ranchers to feed cattle.

The decline in placements is good news for cattle producers, as it means that there is less competition for cattle, which should lead to higher prices. The lower marketings are also good news for producers, as it means that there is less supply of beef on the market, which should also lead to higher prices.

The overall takeaway from the Cattle on Feed Report is that the beef industry is in a good position. Tighter feedlot supplies and higher prices are good news for producers, and should help to boost the industry's profitability.

In addition to the decline in placements, the Cattle on Feed Report also showed that the mix of cattle on feed has changed. As of August 1st, steers accounted for 82.3% of the cattle on feed, up from 81.2% a year ago. Heifers accounted for 17.7% of the cattle on feed, down from 18.8% a year ago.

The shift towards more steers on feed is likely due to the higher prices that steers are fetching. Steers are typically sold for slaughter at a higher price than heifers, so ranchers are more likely to send steers to feedlots.

The lower placements and the shift towards more steers on feed are both positive signs for the beef industry. They suggest that the industry is in a good position to meet the demand for beef, and that prices are likely to remain strong in the coming months.
 

Photo Credit: gettyimages-jacqueline-nix

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