Although cattle have been selling for a premium, analysts are forecasting higher placements in this Friday’s Cattle on Feed report as feedlots take advantage of inexpensive corn.
Yearling feeders have been in high demand as feedlots look for lightweight animals to bulk up and supplies remain limited which has helped push prices higher. Heifer retention has further constricted the market as producers look to rebuild herd sizes.
Year-to-year data in the Cattle on Feed report has been difficult to compare as the previous two years of drought conditions have pushed cattle into feedlots early and improving pastures this year have kept livestock on the farm longer than usual.
Jim Robb, Director of the Livestock Marketing Information Center, expects this Friday’s placement number to be the wild card and he says analyst forecasts cover a wide range. In an interview with Kansas State University Extension last Friday, Robb said he’s expecting the report to show placements up three percent and marketings up fully one percent compared to a year earlier.
“We did a great job of moving steers and heifers as prices were strengthening in the month of October,” Robb said.
He expects the report to show fed cattle supplies continue to tighten, with total cattle on feed down about seven percent.
“Overall we shouldn’t let the placement number, if it’s above a year ago, shock us. We know we have a smaller calf crop, but a lot of that is just a year-to-year comparison with the very low numbers last year.”
Robb says the industry understands the current situation and will view the report, if it’s in line with his expectations, as largely a positive Cattle on Feed report.
Predictions shared by Allendale, Inc. on Wednesday forecast slightly higher placements than Robb, up 4.2 percent compared to a year earlier. The forecasted improvement doesn’t add many cattle as last month’s placements were the lowest in any October since at least 1996.
Allendale also forecasts a dip in the total cattle on feed, predicting a 6.6 percent drop compared to a year earlier.
The October report was released Oct. 31, delayed by the government shutdown. The report showed on-feed inventories at 10.1 million head as of Oct. 1, down 8 percent from a year earlier. Placements last month totaled more than 2 million head, an increase of one percent from the previous year.