LARGE FEEDLOT PLACEMENTS CONTINUE - Where are the calves coming from?
 

USDA's monthly Cattle on Feed report showed that placements of cattle into feedlots continued to surge. The surge in March placements pulled the April 1 cattle on-feed inventory up 3 percent from a year ago. Placements of cattle into U.S. feedlots with of 1,000 hd. or more during March were 18 percent larger than a year earlier.

The USDA provides a quarterly breakdown of the on-feed numbers by animal class. As of April 1 of this year, the number of steers on-feed was up 2 percent from a year ago. And the number of heifers on-feed was 4 percent larger than 1998's. So, the number of heifers held for breeding purposes apparently continues to decline.

Most of the cattle placed into feedlots during the first quarter of 1999 will reach market weight this summer. The latest Cattle on Feed report suggests that slaughter steer and heifer prices will erode seasonally into the low $60 per cwt. this summer. At times prices in the upper $50's are possible if feedlots do not market cattle much more aggressively than they did last year.

The surge of cattle into feedlots means that the reduction in beef supplies expected for the latter part of 1999 will likely be delayed. If the 1998 calf crop number was any where close to correct, cattle available for placement should decline significantly. Given the reductions in beef cow numbers over the past few years, beef supplies could drop significantly as soon as cattlemen decide to hold on to beef heifers rather than sell them as feeders. Feeder calf prices are still expected to be around $10/cwt. higher this fall than last. Improved prices will not put Georgia cattlemen in the black unless the rains start, however, as early cuttings of hay will be off from last year and pastures start spring in poor shape across much of the state.
(John McKissick)

Back to Cattle Outlook