Feedlot Inventory Continues to Swell
Counter-seasonally strong feeder cattle prices this fall indicated good demand despite growing feeder cattle supplies. The October Cattle on Feed report confirmed that much of that demand came from feedlots. September feedlot placements were up 13.5 percent year over year, more than generally expected ahead of the report. Marketings were up 2.9 percent over last year. Feedlot inventories for October 1 were pushed higher by the large placements to 5.4 percent above year ago levels. At 10.813 million head, the October on-feed inventory is the largest October inventory since 2012.
September placements were higher across all weight categories but largest in relative terms for the heaviest and lightest weight categories. Placements under 600 pounds were up 17.4 percent year over year while placements over 800 pounds were up 14.4 percent compared to last year. Placements in the 600 and 700 pound categories were up 13.3 and 8.9 percent respectively.
Quarterly on-feed estimates in the October report showed that the number of steers on-feed was up 1.6 percent year over year on October 1 while the inventory of heifers in feedlots was up 13.0 percent from one year ago. This indicates continued growth in heifers on feed (July 1 heifers on feed were up 10.6 percent year over year). Heifer slaughter so far this year is consistent with these inventory totals, up 12 percent year over year, and suggests that heifer slaughter will continue to grow for the foreseeable future. These numbers suggest that heifer retention (and likely herd growth) is slowing. However, the average ratio of steer to heifer slaughter (which peaked recently in 2016) and is adjusting down, is still at levels not seen since 1975 (prior to mid-2015). Steer slaughter for the year to date is up 2.9 percent year over year.
Steer and heifer carcass weights continue to run well below last year with reported carcass weights for the most recent week down 16 pounds for steers and down 15 pounds for heifers compared to the same time last year. Average fed carcass weights are down 14.6 pounds for the year to date. Average fed carcass weights are down due to lighter steer and heifer carcasses and a growing proportion of heifers to steers in the fed slaughter mix. USDA reports total cattle slaughter up 5.8 percent year over year so far this year with beef production up 4.2 percent for the year to date.
