February brought improvement. Fed Choice steers in the Amarillo area moved up $2/cwt. by mid-month. Prices held steady there and ended February $3.50/cwt. higher than a year ago.

Feeder cattle and calf prices also fared better, though with considerably more volatility. For the month, 600- to 700-lb. feeder steers averaged $1.50/cwt. higher but stayed below the year-earlier level.

More On Inventory As I noted last month, the Jan. 1, 1999 cattle and calf inventory recorded 1% fewer head on farms and ranches than a year ago. Beef cows were also 1% lower and beef replacement heifers were off 4%.

These figures, along with a 1% smaller calf crop in 1998, strongly suggest a tight supply situation for 1999. Here are other interesting statistics from this same report.

* The number of cattle and calf operations totaled 1,115,650 -- down 3% from 1997.

* Operations with beef cows were down 2%; those with milk cows were off 6%.

* The largest number of beef cow operations were in Texas at 131,000 -- representing 15% of the nation. Next was Missouri with 59,000, then Oklahoma with 52,000. These three states accounted for 28% of total U.S. beef cow operations.

* Of all U.S. beef cow operations, 79% had less than 50 head; another 12% had 50-99 head. Only 0.5% of operations reported 500 or more beef cows.

* In contrast was the proportion of beef cows by size groups. For example, although they represent the largest number of cattle operations, those with less than 50 beef cows had only 30% of the cows. The largest cattlemen -- 500 or more cows (there are only 5,485 of them) -- accounted for 15% of inventory.

Cattle Feeding Picture Cattle and calves on feed for the U.S. slaughter market in feedlots with capacities of 1,000 head or more totaled 10.5 million head on Feb. 1. That's 3% below 1998 and 2% lower than January. The most cattle on feed were in Texas (2.66 million), with Nebraska recording 2.15 million.

Some minor revisions have been made in the 1998 cattle feeding estimates. While not major, they do alter the data somewhat.

Fed cattle marketings in January reached 2.02 million head -- a 2% increase over 1998 but 10% below December. Kansas had the most marketings with 4% more than a year ago. Texas was next but recorded no gain.

Placements of cattle and calves on feed into feedlots in January totaled 1.92 million head. That's 11% more than a year ago and 27% more than a month earlier. This quick and significant gain in cattle movement could cause problems six months from now.

Nebraska led in January placements with a 15% gain over last year. Texas increased 8% and Kansas 14%.

In January, placements of cattle and calves weighing less than 600 lbs. totaled 379,000. The 600- to 699-lb. group totaled 623,000 head. The 700- to 799-lb. group was 599,000 head; and the 800-lb.-and-greater class was 322,000. Each was a strong gain over the year-earlier figure, particularly in the lighter weight calves.

This report also offers good detail on feedlot marketings by size of operation. There were 102,000 cattle feedlots operating in the U.S. with capacities of 1,000 head or more. In 1998, these feedlots marketed 22,770,000 head of fed cattle. Just 45 lots, however, accounted for 27% of these marketings, and 60 more accounted for another 19%.

That means 105 feedlots handled 45% of all cattle fed by commercial feedlots in the U.S. With the current interest in packer concentration, these statistics are notable. 'Concentration' is apparently a word that applies to much of the beef cattle production level as well.

Heading Through Spring The cattle market seems poised to move to higher levels this spring. Improved fed cattle prices, plus expected reduced feedlot marketings in March-April, should allow continued fed cattle strength.

If increased feedlot placements continue to gain sharply (like those recorded in January), it could cause some supply problems as early as summer.

Feeder cattle and calf prices will likely continue to register higher levels through spring. Stronger fed cattle prices, fewer available feeder animals and the potential of further reductions due to ranchers holding back heifers, will force feedlots to pay more for replacements. This scenario is quite likely.

Since lighter calves will be more common, they might not capture as much of the price gains as the heavy weights.