The cattle market in September held steady most of the month. Fed cattle in the Amarillo feedlot area remained in the $65-66/cwt. range, ending with some slight strength the final week.

Feeder cattle and calves didn't show much price improvement in September. In general, the market lost about $1 from the previous month. Considering the time of the year, however, it was negligible. As has been quite common in the last few months, heavier weight feeders have been scarce, as have price reports.

Production Concentration Last month, we examined the degree of concentration at the feedlot level. Now, let's look at beef cow operations.

The average beef cow herd size in the U.S. is only 39.1 cows per operation. In 1998, there were 855,860 beef cow operations, of which 79% had less than 50 head. While most of these small cattle herds are spread all over the nation, the larger operations are quite concentrated.

The proportion of these smaller ranches is declining each year and their share of the U.S. beef herd is also decreasing. The semi-large operations - those with 200-499 beef cows - are increasing both in number and importance.

Last year, less than 1% of U.S. beef operations had 500 cows or more, but these accounted for 15% of the nation's beef cow herd. The number of larger operations has remained constant but is gaining substantially in importance. There were only 5,485 ranches of this size, and 42% of them are in Texas, Montana, Nebraska and Wyoming (see table U.S. Beef Cattle Operations).

Lighter Weight Placements Cattle and calves on feed for the slaughter market in U.S. feedlots with a capacity of 1,000 head or more totaled 9.53 million head on Sept. 1. That's up 5% from a year ago and 3% from the previous month.

Major percentage gains were recorded in Washington, Idaho, Iowa, Colorado and Nebraska. In contrast, substantial percentage decreases were reported in South Dakota, New Mexico and Oklahoma. The largest absolute decline on feed numbers was in Texas which fell 50,000 head or 2%.

Fed cattle and calf marketings in August were 2.03 million head, 4% above last year's level but slightly below August 1997. Eight states recorded an increase in marketings, with a distribution very similar to the on-feed statistics.

Placements of cattle and calves into feedlots in August totaled 2.41 million head - 17% above 1998 and 33% higher than July. Only New Mexico and South Dakota reported lower placements than a year ago. Almost all the other states recorded double-digit percentage increases.

Cattle and calf placements by weight groups shifted to the lighter animals in August. Each weight group recorded a 13-16% gain in numbers over a year ago, while the lightest class - those less than 600 lbs. - rose 29%. Given this huge placement increase, these lighter calves suggest a longer feeding period and less of a fed cattle marketing problem until next year.

Market Direction Is Largely Up The fed cattle market will likely stay at its current level through the rest of the year. There may be some weakness as early winter comes, but nothing too drastic. Prices should hold up well into 2000.

The exceptionally large placements of the last two months could cause some oversupply problems by the latter part of the new year's first quarter. After that, it will depend on feedlot attitudes during the next couple of months.

Feeder cattle and calves might display some loss in market strength as heavy fall sales begin. With fairly strong fed cattle prices and a continued profitable feedlot outlook ahead, chances of any major weakness in these kinds seems unlikely.

Moving into 2000, things look even better. Supplies of feeders will be down and the momentum from the previous year will help keep prices firm.