USDA’s monthly Cattle On Feed report is always highly anticipated by the market. The report provides some guidance for trade going forward. At times, the report can be especially important if the cattle inventory figure differs significantly from aggregate industry expectations going into the report.

Meanwhile, on a quarterly basis, USDA also provides a breakout of feedyard inventory by class – steers, heifers, cows and bulls. With that in mind, USDA’s first quarterly Cattle On Feed report of 2015 potentially provides some important signals about cowherd expansion. In the latest quarterly report, heifers and heifer calves represented 33.8% of the total feedyard population – that’s equal to the lowest previous level established back in April 2006.

Clearly, for now, this seems to be an important indication of producers’ desire to rebuild the cow herd. However, any number of factors could change that initiative, including weather and/or slipping confidence in the market.

How do you perceive the data outlined in the accompanying chart? Is the trend consistent with what you’re observing? Perhaps most importantly, how tentative is the current confidence among cow-calf producers? Given the market’s behavior of late, will producers stay the course or will this current trend reverse direction? Leave your thoughts in the comments section below.

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