The January cattle inventory survey said the U.S. herd has grown for the second consecutive year. According to USDA, the country started 2016 with 92 million cattle and calves, up 3.2% from a year earlier and the most cattle at the start of a year since 2011. The 3.2% increase is the biggest annual inventory increase since 1974. USDA lowered their estimate of the January 2015 cattle inventory by 657,000 head.

USDA reduced the 2014 calf crop by 378,000 head making it smaller than the year before for the 19th consecutive year. The 2015 calf crop was 2.3% larger than the year before, which is the first increase since 1995. The combined number of heifers not kept for breeding plus steers was up 3.9% at the start of 2016.

The inventory of beef cows was up 3.5% and dairy cow inventory was up 0.1% on January 1. Beef replacement heifers were up 3.3% and dairy replacements up 2.4% compared to 12 months earlier. USDA cut their estimate of the January 2015 inventory of beef cows by 391,000 head, but added 309,000 to the number of beef placement heifers.

Fed cattle prices were higher this week in very light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $132.20/cwt, up $1.20 from last week's average, but down $26.53 from a year ago. There was no reported price quote this week for dressed steer prices.

This morning the choice boxed beef cutout value was $222.50/cwt, up $3.65 from the previous Friday, but down $19.48 from a year ago. The select carcass cutout was $218.45/cwt, up $1.12 from last week, but down $16.39 from a year ago.

This week's cattle slaughter totaled 534,000 head, down 5.8% from last week and down 2.2% from a year ago.

The average steer dressed weight for the week ending on January 23 was 899 pounds, up 1 pound from the week before and up 19 pounds from a year ago. This was the 84th consecutive week with steer weights above the year-ago level.

Prices at the Oklahoma City Stockyards this week were steady to $3 lower on feeder steers and $3-$5 lower on calves than last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $210-$222, 450-500# $214-$217.50, 500-550# $185-$200, 550-600# $178-$197, 600-650# $157.50-$186, 650-700# $160-$174.50, 700-750# $153-$163, 750-800# $149-$155.75, 800-900# $141.50-$149.75 and 900-1000# $137-$151.50/cwt.

Live cattle futures were a bit higher this week while feeder cattle were lower. The February live cattle futures contract settled at $136.05/cwt today, up 75 cents for the week. April fed cattle settled at $134.40/cwt, up 40 cents from the previous week. The June contract ended the week at $124.05/cwt, up 63 cents from the previous Friday.

March feeder cattle ended the week at $153.82/cwt, down $3.43 from a week earlier. April futures lost $3.20 this week to close at $153.47/cwt. May feeder cattle settled at $153.05/cwt.