The latest Cattle on Feed report pegs March 1 feedlot inventories at 10.77 million head, 101 percent of year ago levels. February marketings and placements were both up year over year partly because of an extra business day in February due to leap year. Marketings were 105 percent of last year with daily average feedlot marketings equal to year ago levels. Placements were 110 percent of year ago levels, within a wide range of pre-report expectations. The placement number is not as bearish as viewed by some. First, the extra day in February allows more placements during the month. Secondly, it was compared to a small 2015 value that was nearly five percent under the five year average. Nevertheless, it was up and was the first significant year over year increase in placements in two years. Larger feeder cattle supplies mean that more cattle will be coming to feedlots and increased year over year placements will likely be the expectation for many months to come.
Spring started officially last weekend but in numerous ways spring came early and has been evident since February. Despite a winter storm currently impacting the Northeast, unseasonably warm temperatures have predominated across much of the country recently. In Oklahoma many trees and plants broke dormancy in February and wheat reached the first hollow stem stage two to three weeks early, prompting large movements of feeder cattle to market in February rather than the more typical early March pull-off date, These no doubt contributed to the large February feedlot placements and may partially offset some March placements. March feeder auction totals in Oklahoma so far are also bigger than year ago levels but significantly less of a year over year increase compared to February. There are indications that a significant number of stocker cattle are still on wheat for grazeout due to low wheat prices. That decision may be reinforced and expanded by the hard freeze over the weekend in northern Oklahoma covering Saturday, Sunday and Monday mornings. Much of the region experienced 15 to over 30 hours of below freezing temps over the weekend. Though crop damage assessment will take several days, the likelihood of damage may prompt additional demand for stocker cattle to graze out wheat. Stocker cattle grazing out wheat will typically be marketed in May.
Other signs of an early spring have been evident in meat markets. Boxed beef increased impressively the past two weeks with strength in both middle meats and wholesale ground beef markets suggesting some early grilling demand. The Choice-Select spread bottomed seasonally in mid-February, about a month earlier than usual, and has widened back out to roughly $10/cwt. indicating strong demand for Choice beef. Beef retail prices increased seasonally in February according to the latest retail data, while retail prices for pork, turkey and broilers all decreased. Easter is early this year, on March 27, and may be impacting seasonal meat demand in March. Easter occurs in March only once every four or five years on average. The last time Easter occurred in March was 2013 but the next time will not be until 2024.