Feedlot inventories had been under year-ago ranges for the fourth consecutive month in accordance with the newest USDA Cattle on Feed report. There have been an estimated 11.68 million head of cattle on feed as of January 1st, which is 3 p.c decrease than January 1, 2022.
December placements had been down 8 p.c in comparison with December 2022 which was within the vary of pre-report expectations. The entire weight teams had been decrease apart from the 900-999 pound group which was even with a yr in the past. December marketings had been 6 p.c and sure affected by the winter storms that impacted transportation. General, the decrease placements, marketings, and complete cattle on feed numbers had been largely anticipated by pre-report analysts.
The feedlot provide dynamics are completely different this yr than in 2022. Feedlot stock peaked in February in 2022 at 12.2 million head. It’s typical for provides to construct seasonally by means of the autumn months and peak in winter. Nonetheless, it’s not clear if that would be the case for the 2022-2023 fall/winter seasons. The December 1 and January 1 feedlot inventories had been primarily equal, and each had been decrease than November 1. Many cattle entered feedlots prior to common in 2022 which seems to have led to an earlier stock peak.
Final week’s report additionally included the quarterly information on variety of steers and heifers in feedlots (see chart under). The variety of steers in feedlots was 4.5 p.c under a yr in the past whereas the variety of heifers was solely 0.5 p.c decrease. The share of heifers within the feedlot combine has been rising the previous few quarters. The present degree of 39.8 p.c of feedlot inventories being heifers is the very best (up to now) on this cycle. It’s also one other indicator of herd liquidation in 2022 as these are heifers that weren’t retained to supply a calf in 2023.
Whereas the narrative of the previous 3 (or extra) years has been plentiful provides of fed cattle, 2023 will most likely be pushed by tighter provides. We’re beginning the yr with tighter provides and the expectation that fewer feeder cattle can be shifting into feedlots throughout 2022.
