Industry At A Glance: Placement weight trends indicate feedyards are feeding longer

Industry At A Glance: Placement weight trends indicate feedyards are feeding longer

It appears cattle feeders are more focused on feeding cattle longer and to heavier weights to avoid turnover risk and maintain occupancy.

During the past several weeks, Industry At A Glance has focused on the importance of heavier slaughter weights to the feeding sector (see How Much Higher Will Slaughter Weights Go? and Heavier Cattle Weights Changing Feeders’ Breakeven Assumptions). Any discussion of increasing out-weights inherently draws attention to in-weight trends on the other side.

This week’s illustration highlights placement weight category trends over time. Perhaps most significant, the heaviest category (800 pounds and more) has gone from comprising 23% of all placements in 2000 to having surpassed 32% in 2014. Accordingly, the middle-weight categories (700-799 pounds and 600-699 pounds) have declined proportionately during that time (~5% and ~4%, respectively). Meanwhile, placement of calves weighing less than 600 pounds (the lightest category in USDA’s monthly Cattle on Feed report) has remained relatively constant at 25% of the placement mix (thus not shown on the graphUSDA placement ratesSimultaneously, the graph also highlights the overall placement weight average. Despite the relative shifts among the three heaviest categories discussed above, the overall in-weight has remained relatively constant during the past 15 years. From that perspective, overall throughput – from a sector-wide perspective – remains fairly stable and predictable.

These placement weight trends are somewhat contrary to conventional thought, as tight supply should induce cattle feeders to pull in more lightweight calves to maintain occupancy rates. That is, diminishing replacement inventories haven’t led to the feeding sector aggressively chasing lightweight cattle to fill pens. Rather, in light of the previous discussions surrounding out-weight, it appears cattle feeders are more focused on feeding cattle longer and to heavier weights to avoid turnover risk and maintain occupancy. 

How do you perceive these trends? What other factors may be driving these patterns – both from an in-weight and out-weight perspective? What impact will this have upon the stocker and cow-calf sectors in the coming years? Leave your thoughts in the comments section below.

 

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