The most recent Cattle on Feed report was the primary month in 2022 that feedlot inventories have been under year-ago ranges.The report was largely according to pre-report expectations.Whole cattle on feed as of October 1 was estimated at 11.45 million head which is about one p.c decrease than the identical date in 2021. As proven within the chart under, stock elevated from September to October, however this was pushed by the same old seasonal sample of constructing inventories within the fall. The decline from a year-ago is a extra telling comparability and has implications for inventories this fall and beef manufacturing in 2023.
Feedlot inventories have been destined to dip under year-ago ranges sooner or later. Declining calf crops the previous few years ought to ultimately result in decrease feedlot inventories. Nevertheless, herd liquidation impacts and enormous placements of lighter cattle stored feedlot inventories elevated by way of the summer season. Extra gentle cattle have been positioned within the spring and summer season than standard. Whereas that pushed up feedlot stock numbers in the summertime, those self same cattle won’t be round for placement this fall after they may need sometimes moved into feedlots.
Moreover, the variety of heifers on feed is greater as producers have determined to retain fewer heifers for breeding functions. Drought and excessive enter prices are main drivers of those selections. The most recent report included the quarterly feedlot combine estimates and the proportion of heifers in feedlots was slightly below 40 p.c on October 1st. That is the biggest share of heifers in feedlots over the previous 20 years as proven within the chart under. The variety of steers on feed is about two p.c under year-ago whereas the variety of heifers is multiple p.c greater.
This report could possibly be the start of a streak of decrease feedlot inventories when in comparison with a 12 months in the past. There’s nonetheless uncertainty surrounding placements shifting ahead, although. Poor pasture situations and an unlucky outlook for winter wheat suggests continued placements of lighter cattle which may usually spend extra time grazing.
Tighter cattle and beef provides in 2023 look like a foregone conclusion at this level. Reducing feedlot inventories this fall will possible result in decrease beef manufacturing in 2023 and there might be fewer cattle to be positioned subsequent 12 months. Fewer cows and heifers to calve subsequent 12 months implies tighter provides of feeder cattle subsequent 12 months, too. These market fundamentals present important assist for stronger cattle costs shifting ahead.
Supply: Mississippi State College
