The June USDA Cattle on Feed report shows May placements at 90 percent of last year and marketings at 92 percent of last year.  There was one less business day in May this year compared to last year.  The June 1 on-feed total was 101 percent of last year. 

Feedlot inventories have averaged 0.4 percent higher each month on a year over year basis in the first six months of 2015.  This compares to the same period last year when monthly feedlot inventories were down 2.4 percent on a year over year basis.  Feedlot inventories transitioned to higher levels in late 2014 as a result of several factors.  Large placements of lightweight feedlot placements in the first half of 2014 contributed to a trend of increased days on feed that began in the second quarter of 2014.  Though feedlot placements have been dominated by heavyweight placements since the middle of 2014, increased days on feed has continued as feedlots pushed carcass weights to record levels.  Carcass weights for the year to date in 2015 are up an average of 2.2 percent year over year compared to an average 0.1 percent decrease for the same period last year.  These factors have contributed a slower feedlot marketing rate.  Marketings as a percent of feedlot inventories have averaged 15.2 percent for the year to date compared to 16.2 percent for the same period last year.

Relatively constant feedlot inventories the past few months may create the illusion that feedlot production is holding close to year ago levels.  However, feedlot placements have been below year earlier levels for 13 of the past 15 months.  The 12-month moving average of feedlot placements has continued to decline and is at the lowest level in May for the current feedlot data series going back to 1996.  Fewer feedlot placements inevitably results in fewer cattle for slaughter.  In slaughter data back to 1950, the April 12-month moving average of steer and heifer slaughter is at the lowest level since November, 1968. 

Steer and heifer slaughter is down 6.6 percent for the year to date compared to the same period last year contributing to a 5.1 percent year to date decrease in beef production.  Herd expansion adds an additional squeeze to tight cattle supplies as a result of increased heifer retention.  The most recent weekly slaughter data shows that heifer slaughter as a percent of combined steer and heifer slaughter is at the lowest level since June 1974.  Cattle supplies and feedlot production will remain tight through the remainder of 2015.