The August 1st Cattle on Feed report was launched on August 19 and confirmed feedlot inventories declined seasonally however remained above year-ago ranges. As James talked about final week, drought continues to play a key function within the motion of cattle into feedlots this summer season. Placements once more exceeded expectations pushed by massive placements of lighter-weight cattle.
Placements of cattle into feedlots throughout July have been up about two % above July 2021. This was above pre-report expectations and was pushed by placements of lighter cattle. Placements of cattle weighing lower than 700 kilos have been about 10 % above July 2021 ranges whereas placements of cattle weight lower than 700 kilos have been down 2.5 %. This continues the pattern that has occurred many of the 12 months – feedlots inventories proceed to be supported by stronger placements of lighter cattle. Marketings have been down 4 % in comparison with a 12 months in the past. This was on the low finish of expectations however throughout the vary. Complete cattle on feed was up about one % above August 1, 2021.
Drought and pasture situations proceed to push some cattle into feedlots ahead of regular which is contributing to the bigger placements of lighter cattle. The apparent implication is these cattle won’t be offered later this fall after we may usually anticipate them.
The broad implications for cattle markets are just like these of previous experiences – smaller anticipated provides and better anticipated costs. Tighter feeder cattle provides are nearly actually already upon us, regardless of placements and cattle on feed nonetheless being above 2021 ranges. We’re in a situation the place there are extra cattle in feedlots than a 12 months in the past solely as a result of there are much less feeder cattle “outdoors of feedlots” than would usually be anticipated. Feeder cattle futures costs are reflecting these expectations with late fall and early spring contracts buying and selling close to $190 per cwt.
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