“Ample supplies of feeder cattle and favorable feeder prices should encourage feedlots to maintain a high turnover rate and avoid the wreck that resulted from extremely heavy carcass weights last year,” says Peel, Extension livestock marketing specialist at Oklahoma State University. “While feedlots are clearly moving more cattle through, the on-feed total is not growing on a year-over-year basis as marketings outpaced placements in August.” 

Wes Ishmael

October 3, 2016

2 Min Read
Feedlot marketing appears to be current

“Ample supplies of feeder cattle and favorable feeder prices should encourage feedlots to maintain a high turnover rate and avoid the wreck that resulted from extremely heavy carcass weights last year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.   

That’s worth keeping in mind, considering the increased numbers in the monthly Cattle on Feed report released last week. Though expected—especially with two more business  days in August this year than last—the double-digit increases in August cattle placements added to negative market psychology.

“Placements totaled 1.88 million head, an increase of 15.13% from August 2015 and a 0.14% increase from the 5-year average from 2011 to 2015,” according to Brian Williams, Extension livestock economist at Mississippi State University, in the most recent issue of In the Cattle Markets.

“This month’s numbers continue the trend of increasing heavy placements, with cattle larger than 800 pounds seeing a 21.2% year-over-year increase while cattle less than 600 pounds saw an 8.9% year-over-year decrease in placements.”

On the other side of the scale, cattle marketed in August (1.87 million head) were 17.63% more than last year and 1.98% more than the 5-year average, Williams says. Though the total on-feed inventory (10.14 million head) was 1.49% more year to year, he points out it was 0.50% less than the 5-year average.

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“While feedlots are clearly moving more cattle through, the on-feed total is not growing on a year-over-year basis as marketings outpaced placements in August,” Peel explains. “The strong pace of marketings is confirmed with August cattle slaughter up sharply year over year. Heifer slaughter outpaced steer slaughter in August, up 13% from last year (on an adjusted daily average basis) compared to steer slaughter up 5.4% year over year.”

For the balance of the year, steer slaughter is expected to moderate, still up but by a smaller amount on a year-over-year basis, Peel says, while heifer slaughter will continue sharply higher compared to last year.

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