Cattle and calf prices have been sliding lower for more than a month. For the most part, prices remain higher than last year at this time, even though they are declining. In the middle of this slide comes the next cattle on feed report which will indicate fed cattle supplies for the next few months.
The next cattle on feed report will be released on Friday, September 20th. Most market analysts’ forecasts are published by now and, generally, indicate that they expect marketings and placements to be below last year. Feedlot marketings should be down about 3.5 percent lower than last year. While below last year, one less workday during August means that daily average marketings were slightly higher than last year.
There is a fairly wide range of market analysts’ estimate of placements, from down 4 percent to up 2 percent. Seasonally, August placements tend to be large as calves born in the Spring and yearlings coming off summer grazing programs start to be placed. September and October tend to be the months with the most feedlot placements. Fewer feeder cattle were sold this August than last year according to available data on feeder cattle sales and feeder cattle reported on the CME feeder cattle index. But, about 29,000 more feeder cattle were imported from Mexico during August. August placements also occurred against a backdrop of falling fed cattle futures prices. Even though corn prices continued to decline lower fed prices forced lower feeder cattle prices throughout the month.
Typically, more feeder cattle are placed than fed cattle marketed in August. That is likely the case again this year, which leaves the number of cattle on feed up about 0.3 percent on September 1. So, compared to last year supplies of cattle in feedlots implying fed beef production should remain close to last year’s level for most of the rest of the year.
The report should support the continued trend of more beef production from fed cattle than a year ago. Both fed steer and heifer weights are headed higher, seasonally, and are at record highs for this time of the year. The percent of beef grading Choice is higher than a year ago indicating that there are larger supplies of Choice beef on the market compared to last year. From a beef supply perspective, it should not be surprising to see the Choice beef cutout and cattle prices struggling to gain ground compared to last year.
Watch for placements and the total number of cattle on feed in the report on Friday, September 20th. Those will provide some good information on beef supplies for the rest of the year. Placements should be larger in September and October as Fall runs of calves start across the South and the rest of the country.
Anderson, David. “Summer Slide.” Southern Ag Today 4(38.2). September 17, 2024. Permalink
