The most recent USDA Cattle on Feed report confirmed March 1 feedlot inventories at 11.645 million head, down 4.5 p.c 12 months over 12 months and the bottom March stock since 2017. Placements in February have been down 7.2 p.c 12 months over 12 months and the sixth consecutive month-to-month lower in placements. In actual fact, placements have been down 10 of the previous 12 months. February marketings have been down 4.9 p.c from one 12 months earlier.
Determine 1 exhibits month-to-month stock totals (blue line) and a 12-month shifting common (MA) of month-to-month feedlot inventories (inexperienced line) since 2011. Whereas month-to-month feedlot totals range seasonally, the shifting common removes the traditional seasonality in order that modifications month to month point out the underlying pattern in feedlot manufacturing. March 2023 was the sixth consecutive month of declining feedlot inventories 12 months over 12 months. With feedlot totals lowering since October, the MA peaked in September 2022 at 11.8 million head, dropping to 11.63 million head as of this newest report, the bottom degree since October 2020.
Declining feedlot manufacturing leads instantly to 2 questions. How low will feedlot inventories go within the coming months? And when will the low occur? Determine 1 could present some indications of what to anticipate. The earlier multi-year low within the feedlot stock MA was in October 2014, after drought-forced herd liquidation in 2011-2013. The present beef cow herd is barely smaller that the 2014 herd degree. The meat cow herd is more likely to drop a bit extra in 2023. It’s affordable to anticipate that common feedlot inventories will drop near the 2014 low of 10.375 million head or presumably even decrease sooner or later within the coming months.
The query of when that low will occur is trickier. Though there are expectations for diminishing drought situations in 2023, the drought continues for now and it’s not clear whether or not liquidation can be pushed even additional this 12 months. The smallest calf crop of the following few years can be in 2024 on the earliest. Feedlot inventories will decline by means of 2023 with the low in 2024 or past. Determine 1 exhibits that the feedlot stock MA decreased from August 2012 till October 2014 following the earlier drought episode. This implies that the approaching feedlot low may not occur till late 2024 or later.
This results in a 3rd query of how lengthy low feedlot inventories will persist. Determine 1 exhibits that, from the MA low in October 2014, common feedlot inventories elevated very slowly till the autumn of 2017 earlier than growing extra quickly by means of 2018 and 2019. Feedlot inventories remained comparatively low for about three years. This was the interval of herd rebuilding when heifer retention was on the highest ranges, with alternative heifer inventories peaking in 2016 and 2017. Not till heifer retention slowed after 2017, have been further heifers out there for feedlot placement. The variety of heifers in feedlots on January 1 elevated by 23 p.c from 2017 to 2019.
It seems that the 2012-2017 interval is a helpful analog for the following few years concerning feedlot inventories. The present state of cattle inventories, particularly the cow herd measurement, alternative heifer inventories and anticipated calf crops are typically analogous to the earlier interval starting in late 2012. In actual fact, the present state of affairs displays a extra extreme depletion of feminine inventories in comparison with the 2012-2017 interval. Based mostly on the analog interval, feedlot inventories will doubtless decline from the feedlot stock MA peak in September 2022 to a degree much like the 2014 low within the coming months and stay comparatively low for the following 4 years or longer.
