An analysis of USDA’s November 2020 Cattle on Feed report.

Amanda Radke

December 2, 2020

3 Min Read

USDA’s latest Cattle on Feed report, which was published on Nov. 20, indicates that cattle on feed as of Nov. 1 is higher than one year ago.

According to the report, “Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 12.0 million head on Nov. 1, 2020.

“The inventory was 1% above Nov. 1, 2019. This is the highest Nov. 1 inventory since the series began in 1996. Placements in feedlots during October totaled 2.19 million head, 11% below 2019.

“Net placements were 2.13 million head. During October, placements of cattle and calves weighing less than 600 lbs. were 570,000 head, 600-699 lbs. were 495,000 head, 700-799 lbs. were 465,000 head, 800-899 lbs. were 387,000 head, 900-999 lbs. were 185,000 head, and 1,000 lbs. and greater were 90,000 head.

Marketings of fed cattle during October totaled 1.87 million head, slightly below 2019. Other disappearance totaled 63,000 head during October, 7% above 2019.”

Read the entire report here.

Michael Nepveux, American Farm Bureau Federation economist, offers an analysis. He writes, “While total inventories are an important component of the report, other key factors include placements (new animals being placed on feed) and marketings (animals being taken off feed and sold for slaughter). Coming in at 11% under 2019, placements in October fell below the average analyst expectation of an 8.9% decrease.

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“The placement number was at the lower end of the range of expectations, coming in slightly above the minimum forecast of a 12.7% decrease. The relatively wide range of forecasts for placements – approximately 8% -- highlights the uncertainty that can exist in forecasting this specific variable, with normal indicators such as feeder cattle imports from Mexico and auction volumes sending mixed signals. A large driver of this pullback in placements is the fact that October 2019 placements were the highest in nearly a decade.

“Placements have been running ahead of year-ago levels since they recovered after declines in April and May at the height of the pandemic. In October, historically the peak month for placements, placements clocked in at 2.192 million head, bucking normal trends and coming in below September’s placements of 2.227 million head. Marketings came in at 0.1% below last year.

“This is slightly below analysts’ expectations of 0.2% above year-ago levels, but well within the expected range and not a surprise. The 1.873 million head that were marketed in October is roughly even with 2019 levels even though October 2020 had one less slaughter day for the month.

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“This November Cattle on Feed report is considered relatively neutral to bullish. While an 11% decline in placements is bullish for future supplies of fed cattle, this was widely expected by the industry.  The overall supply of cattle on feed is up moderately over 2019, and the number of animals marketed throughout October is even with a year ago.

“Looking forward, the big question mark on future reports is the level of resurgence in COVID-19 cases throughout the winter. The packing industry should have gotten better at managing this challenge after the crash course in the spring, but whether or not plants have to be closed is still a risk, albeit hopefully a lower one.”

Read his full analysis here.

The opinions of Amanda Radke are not necessarily those of or Farm Progress.

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