Unexpectedly large December feedlot placements pushed feedyard inventories higher year-over-year, while marketings were in-line with pre-report estimates. Placements of lightweight cattle were nearly 10% higher.
The upcoming USDA Cattle Inventory report - due Jan. 31- will detail how much America’s beef cow herd has declined given the 2021 cow culling rate was the highest since 2011.
With generally rising input costs, cow-calf producers need to put additional effort into cost management. Managing feed costs will be a key to minimizing cow costs and capitalizing on better market conditions in 2022.
The December Cattle on Feed report, released on Friday, was the sixth consecutive month of year-over-year decreases in feedlot inventories, though November and December totals were only down slightly.
Optimism that has built in feeder cattle markets in the second half of the year has been enhanced and consolidated with the fed cattle market breaking out and moving sharply higher in the last two months of the year.
At the end of November, 69 percent of the U.S. was abnormally dry or worse with over 53 percent in some degree of drought. This could result in another severe round of cow liquidation in the first half of next year.
The recent breakout of fed cattle prices after struggling under the weight of beef packer capacity constraints clears the way for cattle markets to move forward with the optimism that has been building in recent months.
Cattle prices are higher now compared to last year and are expected to continue improving in 2022. Live and Feeder futures have priced in considerable optimism for 2022.
The fall feeder run is in full swing with calf prices moving counter-seasonally higher. It is typical for the middle two weeks of November to have the largest weekly auction totals for the year.
