The April USDA Cattle on Feed Report was neutral to slightly bearish but will likely be trumped by the strong cash trade prior to the report release on Thursday.
Cattle and calves on feed totaled 11.6 million head on April 1, 2025.
The inventory was at 98% percent on April 1, 2024, slightly below the trade guess of 98.3%.
Placements totaled 1.84 million head or 105% of last year, which was above the estimate of 103.7%.
Marketings of fed cattle during March totaled 1.73 million head, 1 percent above 2024 and compares to the 100.7% guess.
Scott Varilek, Kooima Kooima Varilek, says slightly higher placements than expectations are not a concern to him.
First, the higher figure is largely due to the small number of cattle moved into feedlots in March 2024.
“So, comparing to that small number I think we’re going to be able to fight this off pretty quick,” he says.
Secondly there may have been a shift from month to month in regards to when some of the cattle were placed with the market trying to normalize after the reopening of the Southern border to Mexican feeder cattle imports.
However, the placements were higher in most states as Varilek says there is a big run of grass cattle that is happening right now.
Kansas placements were up by 8% compared to last year, Nebraska was up 11%, Arizona 9%, with Texas up 1%.
“It’s not something that’s alarming saying we found a bunch more cattle. I do not think that that’s the case. It could be some more cattle coming in from Mexico as we’ve got some delayed on you know delayed tariff news we’ve got that border kind of open with Mexico here to start the year. So, could be some more of the Southern cattle moving across but it does look like it’s pretty spread out across the states there wasn’t just one state that jumped off the books,” he explains.
He says the 98% on feed number seems more in line with numbers in the country than the past few months when inventory in feedlots was pegged at 100% or slightly above.
“You know, seeing all of those 100% on feed or 101%, it just didn’t even feel like that’s not the market that we’re trading. So 98 is more of an accurate number for me to say, yeah, we have less numbers. That’s why cash is doing what it’s doing right now,” he adds.
The inventory included 7.26 million steers and steer calves, down slightly from the previous year. This group accounted for 62 percent of the total inventory. Heifers and heifer calves accounted for 4.38 million head, down 4 percent from 2024.
That indicates to Varilek that heifer retention is taking place but he thinks it is happening much slower than in 2015.
“The cow herd is depleted at a pretty big level. Slaughter cow prices have been amazing. So, it’s pretty easy to cull off some of those cows that are maybe lower producing and try to re-up your genetics. So, we are seeing some heifer retention,” he says.
Varilek says the cash trade from this week though will trump any negative slant on the Cattle on Feed report.
Cash developed in the North at mostly $212 to $215 live, with dressed deals at $332 to $335, $4 to $7 higher than last week’s weighted average of $328.07.
Kansas and Texas at $210, $6 higher than the $204 weighted average last week.
Live and feeder cattle futures closed strong on Thursday and for the week, pushed by cash.
Varilek says the fundamentals finally took hold and he thinks it’s possible for live cattle futures to retest the recent contract highs set in early April.
Feeder cattle futures were also sharply higher but only April made contract highs trying to align with the index before expiration, but again the deferreds are likely to retest the contract highs in his opinion.
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