Feedlot

The feedlot industry displays amazing dynamics over the course of a typical year…and of course, 2020 has been anything but a typical year. The November 1 cattle on feed inventory was 11.97 million head of cattle, up 1.3 percent from one year ago. Exactly what to expect in fed cattle markets in the coming months depends on numerous factors including: the demographics of the feedlot population (both size and gender), feed costs, the time of the year, weather conditions and regional impacts.

Feedlot placements the past five to six months account for the current inventory and consisted of 22 percent feeders under 600 pounds; nearly 18 percent feeder cattle from 600-700 pounds; 22 percent feeders from 700-800 pounds; 23 percent feeders weighing 800-900 pounds; and 15 percent feeder cattle over 900 pounds. The latest quarterly inventory report showed that feedlot inventories currently include 62.4 percent steers and 37.6 percent heifers. This compares to one year ago when feedlots inventories included 60.8 percent steers and 39.2 percent heifers. Feedlot placement weight is related to finished weight of fed cattle. However, the relationship is not one to one. For both steers and heifers in the typical range of placement weights, a one pound increase in placement weight results in 0.5 pounds of additional finished weight.

The Kansas Focus on Feedlots data shows that feedlot average daily gains have been higher year over year every month this year. Steer ADG has averaged 3.53 pounds the past six months and heifer ADG has averaged 3.11 pounds. A study of southern plains feedlots reports the lowest ADG for closeouts in April/May and the highest for closeouts in December/January*. The April/May closeouts include higher proportions of lightweight placements the previous fall. ADG for steer placements weighing 550-600 pounds is 3.47 pounds compared to 3.86 for steers weighing 750-800 pounds.

Kansas feedlots also reported better feed efficiency in 2020 compared to one year ago. Like ADG, feed efficiency reflects size and gender of cattle on feed, weather conditions, and feed quality. While ADG is positively related to placement weight, feed efficiency is inversely related to placement weight. Steers placed weighing 550-600 pounds have an average feed:gain ratio (dry matter) of 5.7 compared to 750-800 pound steers with a feed:gain ratio of 5.97.

It appears that general animal health has been better in 2020 as well. Kansas feedlots reported lower death loss in the first nine months of the year for both steers and heifers compared to last year. For steers, average death loss through September has averaged 1.67 percent. In a multi-year study, average feedlot death loss for 550-600 pound steers is significantly higher at 3.07 percent compared to 1.68 percent for steers weighing 750-800 pounds.

Feedlots will manage and balance these and many other factors as they deal with coming winter weather, rising feed costs, the mix of steers and heifers and the availability of feeder cattle of various sizes. 

*Detailed feedlot parameters are from: Stehle, Anna, Derrell S. Peel and John Michael Riley. “A Profile of Cattle Feeding: Beyond the Averages” Western Economic Forum, December 2018, Volume 16, Issue 2:62-77.

(Derrell S. Peel is a livestock marketing specialist for Oklahoma State University.)

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