Farm Talk

Ag News from Around the Country

April 9, 2013

Reports show fewer, larger feedyards

Parsons, Kansas — The February Cattle on Feed report released by the USDA Feb. 22 shows a continuation of the trend toward fewer but larger feedyards, says Darrell Mark, professor of economics at South Dakota State University.

"In fact, there were 2,000 or 2.7 percent fewer feedyards with less than 1,000 head capacities on January 1, 2013 compared to a year ago," Mark said.

Mark says the report showed there were 30 fewer feedyards with 1,000-1,999 head capacities at the beginning of this year and there was an increase of 10 feedyards over the last year with capacities ranging from 2,000 to 3,999 head.

The number of feedyards with 4,000 to 15,999 head capacities remained constant over the last year, at 515. The number of feedyards with 16,000-23,999 head capacities and 24,000-31,999 head capacities increased by two and three, respectively, which are 2.3 percent and 5.8 percent increases.

The number of 32,000-49,000 head capacity feedyards declined by 5 while the number of 50,000-plus head capacity feedyards stayed constant at 66.

In 2012, the feedyards with less than 1,000 head capacities marketed 2.854 million head.

"That's only 11 percent of total fed cattle marketings for the year, despite the large number of these small feedyards — totaling 73,000," he said.

Further, Mark says this is a decline from 12 percent of total marketings in 2011, and from 15 percent only 10 years ago.

"The largest 50,000-plus head capacity feedyards marketed 33 percent of all fed cattle in 2012. This is up from 25 percent 10 years ago. The second largest category of feedyards — feedyards of 32,000-49,999 head — marketed 15 percent of fed cattle last year," he said.

USDA's report indicated that the total capacity of the 1,000-plus head feedyards was 16.9 million head on January 1, 2013, a decline of 100,000 head since January 1, 2012.

"Despite that decrease, capacity utilization has worsened for feedyards due to larger declines in the number of cattle available for feeding," Mark said.

As of January 1, 2013, about 66 percent of total capacity in the 1,000-plus head feedyards was being utilized, compared to 70 percent a year ago.

"The data from this report indicates that the structural changes in the feedlot industry that were evident over the last several years continued, and even accelerated, in 2012," Mark said.

Mark adds that with high feed costs likely to continue much of 2013 — at least until the 2013 corn harvest — it appears like the number of feedyards will continue to decline — especially for the smaller sized operations, but loss of a few large feedyards this next year will likely occur too. £

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