Drought Drives Placements

The September monthly USDA Cattle on Feed report showed that placements of cattle into feedlots continued to be bolstered by lingering effects of drought.  USDA reported the overall U.S. cattle on-feed on Sept. 1 was 11 million, 10 percent above a year ago.  Even with record large numbers of cattle on-feed, cattle markets in the near term will focus on wholesale prices and daily slaughter levels.  Those factors could keep slaughter cattle prices mostly on the defensive.

August placements of cattle into feedlots totaled 2.3 million.  While this was 15 percent above a year ago,   last year placements during August were small.  Importantly, all of the year-to-year increase in placements was in cattle weighing less than 700 pounds.  Placements of cattle and calves weighing less than 600 pounds were 680,000; 600-699 pounds were 435,000.

Even though placements were well above a year ago, those numbers should not be a major concern.  Of course, that assumes that in coming months placements will not post large percentage increases and should show some year-to-year declines.

Feedlot marketings during August were a little larger than expected at 2.08 million.  The increase likely reflects that proportionally more of the cattle on-feed are in commercial feedlots and are accounted for in the monthly USDA report.  Cattle in feedlots with less than 1,000 head capacity are not included in the report.

Source:  Livestock Marketing Information Center, USDA