Feedlot

The latest U.S. Department of Agriculture cattle on feed report shows the Aug. 1 feedlot inventory was 11.09 million head, up 4.6 percent from one year ago. This is the largest August on-feed total in the cattle-on-feed data series going back to 1996. The August total is down from the previous month following the typical seasonal tendency of feedlot inventories to bottom in September before climbing in the fourth quarter. The 12-month moving average of cattle on feed (which removes the seasonality of feedlot inventories) is currently at the highest monthly level since September of 2012.

July feedlot placements and marketings were both above year ago levels, in part due to an extra business day in July 2018 compared to last year. Placements were 107.9 percent of last year, at the upper end of the range of pre-report estimates. Most of the year-over-year increase in July placements was cattle weighing less than 700 pounds, with these lighter weight placements accounting for 82.7 percent of the total placement increase. It’s possible that some of the increase in lightweight placements was due to drought-related early sales of feeder cattle. Total feedlot placements for the first seven months of 2018 are close to year ago levels, up 0.2 percent for the year to date.

July marketings were 105 percent of year earlier levels and, when adjusted for the extra July day this year, daily average marketings were equal to last year. Total feedlot marketings for January through July are up 2.9 percent year-over-year. The 12-month moving average of feedlot marketings is at the highest level since October 2011.

Feedlot marketings have outpaced placements this year which is helping hold monthly feedlot inventories in the range of 4 to 5 percent higher year-over-year since May. Feedlots have remained current this year continuing a strong performance that began in 2017. A 13 pound drop in steer carcass weights in 2017 illustrates feedlot timeliness that helped offset larger cattle slaughter last year. While steer carcass weights are up 5.3 pounds for the year to date, carcass weights are up only 1.75 pounds year over year in the past eight weeks, indicating that feedlots, in general, remain current.

Heifer carcass weights are up 8.4 pounds so far this year after declining by 11 pounds in 2017. Heifer carcass weights continue to grow relative to steers, up 8.25 pounds year over year for the last eight weeks. The annual average (12-month moving average) of heifers as a percent of steer carcass weights has pushed to new record highs each of the last three months.

Total cattle slaughter is up 3.2 percent for the year to date, led by continued sharply higher female slaughter. Heifer slaughter is up 8.5 percent year over year for the first 32 weeks of the year while beef cow slaughter is up 11.5 percent thus far. Dairy cow slaughter is up 4.1 percent year-over-year and is creeping higher recently. Heifer slaughter will likely show less year-over-year increase for the remainder of the year compared to large end of year slaughter in 2017 but will likely remain up 4 to 5 percent for the year. Steer slaughter continues to run slightly below the large year ago levels; down 0.9 percent for the year-to-date. Steer slaughter will likely be up year-over-year for the remainder year and finish with an annual total above last year. Year-to-date beef production is up 3.2 percent in 2018 with modest increases in steer beef production moderating increased slaughter and carcass weights of heifers and cows.

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