The early portion of 2015 had favorable pasture conditions and good precipitation levels, allowing producers to graze cattle for longer than typical periods. Many of the cattle grazing in 2015 reached the feedlot at significantly higher weights. However, delayed winter wheat emergence could limit winter grazing availability for cattle located in the Southern Plains. This could reduce weights of feeder cattle placed in feedlots as absence of wheat pasture forces cattle into feedlots at younger 4 Livestock, Dairy, and Poultry Outlook/LDP-M-256/Oct. 16, 2015 Economic Research Service, USDA ages and lighter weights. These lighter placements could also lead to lighter fed cattle and dressed weights being marketed in 2016.

Recent placements of feeder cattle in feedlots of 1,000-plus-head capacity in 2015 have been record lows for the series that began in 1996. August 2015 placements were 5 percent lower than August 2014, the lowest for August since the series began. Placements were low because producers kept cattle on pasture longer and generally to heavier weights, and feedlot operators have been resistant to paying high prices for feeders given their losses. The August 2015 category of 800-plus pounds for feeder cattle placements on feed were about 4 percent above August 2014. Because of relatively cheap corn prices, cattle feeders have had the opportunity to keep cattle on feed longer, which has resulted in increased cattle-onfeed inventories year over year.

Like August placements, August marketings of fed cattle were the lowest for August since the series began in 1996. Marketings of fed cattle during August totaled 1.59 million head, or 6 percent below 2014. Cattle feeders have little incentive to sell their animals at current price levels and may be holding on to fed cattle, hoping for better market prices.

Cattle in these increased cattle-on-feed inventories have also been marketed at atypically heavy weights, dampening cattle feeding margins. For example, the estimated breakeven price for October 2015 is $174.22/cwt (Cattle Feeder Simulator, http://www.ers.usda.gov/data-products/livestock-meat-domesticdata.aspx). With current prices, cattle feeders could lose as much as $50/cwt or more. Because of the recent collapse in fed cattle prices, USDA’s third-quarter prices were reduced to $144.22/cwtdown $14 from this time last year. USDA revised fourth-quarter 2015 steer prices to $129-$135/cwt. Lower prices into early 2016 are expected to average $131-$141/cwt.