USDA released the May Cattle on Feed report on Friday, May 20th and it showed continued large numbers of cattle on feed. Placements, marketings, and cattle on feed were 99.1, 97.8, and 101.7 percent of a year ago, respectively. Placements and the number on feed were larger than the average pre-report estimates and so the report was regarded as being a negative one for the market.
The report was important in terms of calf price expectations for later this year. Placements were 99.1 percent of a year ago, 1.809 million head. For the January-April period, 7.651 million feeders have been placed. That is the second largest number, behind only 2019, in the last 20 years. Maybe more important, it is the largest number of placements as a percent of January 1 cattle outside of feedlots. Placements this year have totaled 30 percent of the January 1 feeder cattle supplies. Again, more evidence of pulling feeders ahead and it implies tighter supplies of feeder cattle as the year goes on. Those tighter supplies should translate into higher calf and feeder prices.
The next quarterly cattle on feed report will have some more evidence of heifers on feed. Given the rate of placements of available feeder cattle, heifers as a percent of cattle on feed should remain large, meaning continued herd contraction from the replacement side, as well as the cow side.