Tag Archives: Fed Cattle

The October cattle on feed report was not all that friendly to a market that has been down this week. Cattle on feed and cattle sent to market in the month of September were at or near analyst expectations. However cattle placed into feed yards in September were well above the average analyst estimate. The large placements are likely a factor of dry conditions seen across much of the country. With limited winter grass and wheat pasture available lots more cattle are coming to town and headed for feedlots.

According to the USDA cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on October 1, 2020. The inventory was 4 percent above October 1, 2019. This is the highest October 1 inventory since the series began in 1996.

The inventory included 7.31 million steers and steer calves, up 6 percent from the previous year. This group accounted for 62 percent of the total inventory. Heifers and heifer calves accounted for 4.41 million head, down slightly from 2019.

Placements in feedlots during September totaled 2.23 million head, 6 percent above 2019. Net placements were 2.17 million head. During September, placements of cattle and calves weighing less than 600 pounds were 445,000 head, 600-699 pounds were 360,000 head, 700-799 pounds were 500,000 head, 800-899 pounds were 517,000 head, 900-999 pounds were 300,000 head, and 1,000 pounds and greater were 105,000 head.

Marketings of fed cattle during September totaled 1.85 million head, 6 percent above 2019. Other disappearance totaled 58,000 head during September, 2 percent below 2019.

October Cattle on Feed October 2020 Est. Range of Estimates
On Feed 104.00% 103.30% 102.7%-103.9%
Placed 106.00% 102.50% 98.9%-106.5%
Marketed 106.00% 105.90% 104.9%-106.7%

 

Jerry Stowell, Country Futures, breaks down the report and gives his thoughts on what this means for the cattle market:

 

Full USDA report here:

https://downloads.usda.library.cornell.edu/usda-esmis/files/m326m174z/q811m918x/8c97md838/cofd1020.pdf

Friday at 2PM CT the USDA will release the September cattle on feed report. Given the dry conditions that have plagued much of the Midwest since early August, placements in the September report are expected to be high. That would be the result of yearling cattle coming off of pasture early. Along with calves being weaned early.

In general analyst also expect the total number of cattle on feed to be higher in September 2020 than September 2019. While cattle marketed will be below year ago levels. That could be due partially to fewer work days than the previous year. For the most part weekly cattle slaughter rates have started to equal year ago levels.

Watch for more on this website Friday afternoon when the data is released.

September Cattle on Feed Report Estimates

September Cattle on Feed September 2020 Est. Range of Estimates
On Feed 103.50% 102.2-103.9%
Placed 106.00% 100.8-110%
Marketed 96.70% 95.7-97.5%

 

Thursday brought about another strong day of gains in the grain market. Soybeans continue to hold well over the $10 mark. Looking at a continuous chart that puts soybeans back towards highs not seen since early 2018 before the US China trade war kicked off. Kyle Bumsted with Allendale Inc. believes this now give farmers a unique opportunity to go back and visit their marketing strategy. 2019 has been a year that farmers have seen plenty of government payments, but now the market seems to be giving opportunity to market at a profitable level.

Bumsted also gives strong insight into why the feeder cattle corn spread may be nearing it’s useful end. Rather feeders are looking at the cash difference between the fats getting on the truck and the lightweights coming off the truck. Finally there is the lean hog market that really caught fire on Thursday. Could it be starting to get top heavy or is there more room to go higher?

You can hear all of Bumstead’s comments here: