Record April Feedlot Inventories
The latest USDA-NASS Cattle on Feed report pegged April 1 feedlot inventories at 11.96 million head, 102 percent of last year and a record April level for the data series, which started in 1996. The twelve-month moving average of feedlot inventories is just slightly less than the record annual moving average in January 2007, meaning that the average level of feedlot inventories the past year is just shy of a record level. Regional differences in on-feed inventories were pronounced and likely reflect the impacts of winter weather. Feed lot inventories were up year over year in Texas (up 6 percent); Colorado (up 12 percent), Kansas (up 2 percent); and Oklahoma (up 2 percent). Feedlot totals were down year over year in Nebraska (down 4 percent); Iowa (down 4 percent); and South Dakota (down 4 percent).
March feedlot placements were up 4.8 percent year over year, following larger February placements. Monthly placements had declined year over year from September, 2018 through January, 2019. Total feedlot placements the last six months (October-March), which captures the majority of cattle currently in feedlots, is down 2 percent year over year. Placements were lower in Nebraska (down 11 percent) and Iowa (down 3 percent), both likely reflected weather impacts, along with Arizona; but were up year over year in all other reported states.
So far this year total feedlot placements have been 0.6 percent higher than last year. However, in those three months (January-March) placements over 700 pounds have been down 0.4 percent while placements of cattle under 700 pounds have been up 2.4 percent year over year. This suggests that the bulk of the recent placements will be marketed mid-year and beyond.
Feedlot marketings in March were down 3.4 percent year over year. However, March, 2019 had one fewer business days compared to one year ago so daily average marketings were slightly higher than last year. For the first three months of 2019, total feedlot marketings are unchanged from the same period one year ago.
The April COF report also included quarterly feedlot inventories. As of April 1, the number of steers in feedlots was 1.1 percent less year over year. Heifers on feed were up 7.6 percent year over year. Feedlot inventories by gender provide some indication of herd dynamics with respect to heifer retention. In the five years of herd expansion from 2014-2018, heifers in feedlots averaged 34.4 percent of feedlot inventories. On January 1 and April 1, heifers accounted for 37.7 percent of feedlot inventories, indicating that heifer retention slowed significantly through 2018 coming into 2019.
Choice boxed beef cutout prices pushed seasonally higher last week as summer grilling season demand kicks in. Increased demand, combined with continued weather reduced carcass weights have pushed fed cattle prices higher to challenge and maybe replace the March peaks. Late last week live fed cattle prices were $130/cwt. with the Choice boxed beef cutout finishing the week near $234/cwt.
