Depending on you abacus, Friday’s Cattle on Feed report came in about neutral with fewer placements and slightly fewer cattle on feed than expected, but also fewer marketings.
There were 2.05 million head placed in September in feedlots with 1,000 head or more capacity. That was 4.60% less (-99,000 head) than a year earlier. Heading into the report, most analysts expected placements to be about even with last year. Keep in mind there was one less weekday in September this year.
“High placements have been seen despite profitability concerns,” explained analysts with Allendale, Inc., ahead of Friday’s report. “Kansas State estimates a $110 loss per head on finished cattle in September. First-half 2019 marketings are slated for $122-$125 breakevens. August placements determine a part of the March through early August beef supply.”
In terms of weights, 36.81% went on feed weighing 699 pounds or less; 43.69% weighing 700-899 pounds; 19.5% weighing 900 pounds or more. That continues the trend of recent months.
Analysts with the Livestock Marketing Information Center (LMIC) point out, in the latest Livestock Monitor, that cattle placed at weights lighter than 600 pounds were 14% more in July than the previous year and 19% more in August. Similarly 23% more cattle were placed in July weighing 600-699 pounds; 18% more in August.
September marketings of 1.72 million head were 3.59% less (-64,000 head) than the previous year. Expectations ahead of the report were for marketings to be about even.
So, cattle on feed Oct. 1 were 11.40 million head, which was 5.43% (+587,000 head) more than last year. Most analysts expected to see about 6% more. Still, it’s the largest Oct. 1 inventory since the data series began in 1996.
Of the 12 major cattle feeding states listed in the report, South Dakota was the only one with fewer cattle on feed at the beginning of October, year over year. There were 2.30% more steers on feed than a year earlier and 11.03% more heifers.