The cattle market held steady in February. Fed Choice slaughter steers in the Amarillo feedlot area averaged about $69/cwt. for the month, almost exactly the same as in January. Feeder cattle and calves displayed a little weakness, averaging almost $2/cwt. less than January. Most of the price downturn came late in the month.
Special Feeding Data In its latest Cattle On Feed Report, the USDA provides detailed information on cattle feedlot sizes and importance. The statistics deal with cattle feeding during calendar year 1999. During that year, 2,119 commercial feedlots operating in the U.S. had capacities of 1,000 head or more. These lots accounted for 85% of the nation's cattle feeding of 27,780,000 head.
Further analysis of the data reveals only about a dozen states had feedlots with one-time capacities of 32,000 head or more (Table 1). These 107 feedlots accounted for 40% of all the cattle feeding in the nation. Only six of these states had 38 feedlots with capacities of 50,000 head or more and produced 20% of the total.
On Feb. 1, there were 11.58 million head of cattle on feed in feedlots with a capacity of 1,000 head or more. That's an increase of 10% more than a year ago and a slight gain over January. Each state reported at least the same or more cattle on feed than in February 1999. Kansas and Texas recorded the largest increases, both gaining at least 300,000 head.
Fed cattle marketings in January were 2.05 million head, up just 1% from a year earlier. Only six states recorded the same or more marketings than a year ago.
Cattle and calves placed into feedlots in January amounted to 2.23 million head. This 15% increase is the sixth monthly gain in placements. Kansas, Nebraska, Texas and Colorado reported the largest placement numbers. Only New Mexico reported fewer placements than a year ago.
Feeders placed on feed by weight groups indicate a shift toward the lightest and heaviest weight animals. The number of feeders less than 600 lbs. placed on feed was 494,000 head, up 30% from a year ago. Animals 600 to 699 lbs. rose 11% to 696,000 head, and the 700 to 799-lb. feeders reached 654,000 head - up 8%. The second largest increase was the 800-lbs.-and-more class, up 19% at 382,000 head.
Current feedlot profit levels, cheap feed and a fairly strong outlook for fed cattle prices are stimulating feedlot placements. Given this extremely large feedlot expansion, it could cause an over supply of fed cattle marketings just down the road. The ultimate result might be some real price pressure on fed cattle, probably by this summer.
Feeder cattle and calves will remain in a very favorable position. Strong feedlot demand, coupled with reduced supplies of feeder animals, is likely to continue on through most of 2000.
The spring months should provide ranchers one of the best in years for feeder prices. While the summer may bring some weakness, it is not forecasted to be at all severe.