Although feedyard inventories remain high, recent reductions in placements suggest that fed-cattle numbers and beef production will drop off significantly during the second half of 2001. The Livestock Marketing Information Center notes that USDA's monthly cattle on feed report, released May 18, listed April feedyard marketings at disappointing levels. But the number of cattle placed into feedyards during April was smaller than the marketing figure and well below most expectations. The total number of cattle on feed in 1,000-head and larger lots was 102 percent of a year earlier, the narrowest year-to-year increase since March 1999, according to LMIC.
Additional points regarding feedyard numbers from LMIC:
- April marketings from the 1,000 head and larger feedlots totaled 1.815 million head in the United States, 3 percent below 2000's. This was in line with expectations prior to the report. But, there was one more slaughter day in April 2001 than there was in April 2000. On a daily basis, marketings were 8 percent below a year ago, somewhat disappointing given the large number of cattle on feed.
- Placements into the 1,000 head and larger feedlots during April totaled 1.551 million head in the United States and 1.324 million head in the historic 7-states, a 9 and 10 percent drop from a year earlier, respectively. Placements were at the very low end of expectations prior to the report.
- As in recent months, a higher than average proportion of the placements weighed less than 700 pounds. In fact, placements of cattle weighing less than 700 pounds were 18 percent above a year ago. This suggests that feedlots continue to have difficulty finding heavier weight animals.
- Given last year's greater than seasonal increase in May placements and the limited numbers of feeder cattle that are available, it is likely that placements in May 2001 will be well below 2000's. At the same time, steer and heifer slaughter so far in May suggests that marketings could be close to a year ago.
- Combined, these factors suggest that the number of cattle on feed on June 1 could be at or even slightly below a year ago's level. This suggests slaughter steer and heifer supplies will tighten as summer progresses. Slaughter will likely reach levels that support high-$70 prices sometime this fall.