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It appears cattle feeders are more focused on feeding cattle longer and to heavier weights to avoid turnover risk and maintain occupancy.
April 27, 2015
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 graphSimultaneously, 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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Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.
Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs. He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.
Contact him at [email protected].
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