Feeder cattle markets, after an impressive counter-seasonal run this fall, appear to be taking a bit of a break before Thanksgiving. Feeder markets are holding mostly steady with slight gains still noted for lightweight stockers. Some winter grazing demand continues in Oklahoma but highly variable weather which includes cold temperatures and wet conditions has made receiving cattle and maintaining cattle health a challenge the past week or so. The replacement heifer demand that has been very impressive the past month seems to be mostly done for now. I expect breeding female demand to pick again next spring assuming forage conditions look favorable at that time.
Fed cattle prices have dropped back slightly from record levels but are holding close in the $130-$131/cwt level. Choice boxed beef prices dropped back $2-$3/cwt this past week to the $199/cwt. level. I expect cattle and beef markets to move mostly sideways for the remainder of the year though boxed beef could rebound slightly in early December. Continued decreases in cattle slaughter and beef production through the end of the year will help support prices near current levels for fed and feeder cattle.
The November Cattle on Feed report included October placements up 9.8 percent from last year’s record low levels. Some perspective is important to interpret this report. October placements were down 1 percent from the five-year average that include last year and were down 5.3 percent from the 2007-2011 five-year average. The latest October placement number was slightly smaller than the 2002 level and, with the exception of last year, was the smallest October placement since 1995. By any measure except last year’s record low level, it is still a small October placement number. Seasonally, October is the largest placement month as feedlot inventories grow in the fall to a seasonal peak in December before declining to seasonal lows in August. The November 1 cattle on feed inventory was 10.607 million head, down 5.7 percent from one year ago and is the lowest November 1 feedlot inventory since 1996.