Another bullish Cattle on Feed Report was released Friday. Tight cattle numbers persist as the industry deals with record low placements and near record low marketings.
Derrell Peel, Oklahoma State University Extension livestock marketing specialist, predicts “feedlot inventories will decrease more and faster in the coming months.”
David Anderson, Texas A&M Extension economist, summarizes the report indicates more of the same.
“We’ll start the new year on the same trajectory — fewer cattle on feed,” he says. “It might suggest that the trajectory might be picking up some speed with cattle on feed being down maybe just a little more than it has been.”
Other key factors going forward, according to Anderson include:
- Heifer retention for herd rebuilding will be a big impact on on-feed numbers.
- The recent new record large dressed weights reflect the numbers of days on feed, lower feed costs, good animal performance because of good weather.
“There is sure a bunch of interesting stuff going on for the new year,” he summarizes.
The December report showed cattle and calves on feed in large feedlots (greater than 1,000 head) totaled 11.727 million head on Dec. 1. USDA livestock analyst Michael McConnell says inventory levels are getting tighter — 2% lower than a year ago.
“That’s mainly the result of relatively tight cattle supplies that we have in the United States,” he explains. “It’s also been particularly exacerbated by the lack of cattle imports coming in from Mexico due to concerns about the New World screwworm cases that have occurred in Mexico. That shows up in the Cattle on Feed Report with particularly tight supplies in the southern feeding regions, particularly places like Texas, Oklahoma and Colorado.”
Peel says feedlot inventories have declined year over year for 13 consecutive months, leading to a 12-month moving average total the lowest since October 2018. Average feedlot inventories have declined 3.6% from the peak in September 2022.
Anderson says the wild card continues to be imports from Mexico. “Now we will comparing cattle on feed to a year ago that will reflect no imports of feeder cattle. I think that will be an important distinction in interpreting the report going forward.”
According to USDA, placements at feedlots were down 11% from this same time in 2024 and at 1.6 million head, the lowest for November since the series began in 1996.
During November, placements of cattle and calves weighing less than 600 lb. were 435,000 head; 600 lb. to 699 lb. were 375,000 head; 700 lb. to 799 lb. were 320,000 head; 800 lb. to 899 lb. were 255,000 head; 900 lb. to 999 lb. were 130,000 head; and 1,000 lb. and greater were 80,000 head.
Table 1. December Cattle on Feed and June Through November Placements
| State | COF December | % Change YOY | June–November Placements | % Change YOY |
| | 1000 Head | | 1000 Head | |
| Nebraska | 2670 | +2.7 | 2880 | -7.2 |
| Texas | 2610 | -9.4 | 2015 | -16.2 |
| Kansas | 2440 | +0.8 | 2510 | -5.6 |
| Colorado | 910 | -14.2 | 755 | -21.8 |
| Iowa | 700 | +6.1 | 454 | +4.1 |
| California | 495 | -2.9 | 345 | +1.2 |
| Idaho | 345 | +4.5 | 278 | +1.5 |
| Oklahoma | 340 | -6.8 | 275 | -11.6 |
| | | | | |
| U.S. | 11727 | -2.1 | 10475 | -8.6 |
“The regional changes are significant,” Peel says. “Feedlot inventories in Texas have been smaller than Nebraska the past two months, which has only happened a few times since 1971. Table 1 shows the current on-feed inventories and feedlot placement totals the past six months for the top eight cattle feeding states. Placements have decreased 16.2% year over year in Texas compared to 7.2% in Nebraska. December feedlot inventories are down 9.4% in Texas but actually up 2.7% year over year in Nebraska. Colorado, the No. 4 cattle feeding state, has also dropped sharply with the six-month total of placements down 21.8% and the on-feed total for December down 14.2% compared to last year.”
Marketings were down 12% from a year ago at 1.52 million head, which is the second-lowest marketing number since 1996.
According to Pro Farmer’s Bill Watts, the report came after a strong finish to a winning week for cattle. February live cattle futures rose $2.40 to $230.80, hitting a seven-week high. For the week, February live cattle rose $1.25. January feeder cattle futures gained $5.325 to $345.60, also hitting a seven-week high and posting a weekly gain of $6.50.
Farm Journal’s Michelle Rook reports Monday morning, live and feeder cattle futures made new highs. Rich Nelson of Allendale, Inc., discusses the Cattle on Feed Report with Rook during the Markets Now Early segment saying the big catalyst is the bullish Cattle on Feed Report.
“We’ve got eight months in a row of lower-than-last-year placements,” Nelson summarizes. “They were at about 7% below last year’s level, so the period from now through early summer will be a little tighter supply, as far as from a feedlot perspective.”
Despite this bullish backdrop, Nelson cautions some of the optimism in the cattle market has been tempered by packer-led declines in slaughter numbers. He notes that, while supply constraints create opportunities for higher prices, packers have responded by reducing slaughter rates, which can dampen the effect of these bullish supply indicators.
He emphasizes the importance of monitoring how packers navigate the tightening feedlot supply situation over the coming months, as their response will be central to both supply and pricing outlooks.
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