USDA released its July Cattle on Feed Report on July 22, which gets us to mid-year in cattle on feed inventory.  While marketings were largely in line with the pre-report estimates, June placements were the big surprise, only up 3 percent compared to last year. 

Marketings were up 9.4 percent compared to last year.  June 2016 had the same number of slaughter days as June 2015, so the increase is not due to an additional day, but to a faster marketing and slaughter rate.  The 1.912 million head marketed in June was the most since 2012 when 1.935 were marketed.  The good news in the marketing numbers is that cattle are not backing up in the system, so far.

Placements, up 3 percent, were the big surprise, being on the low side of the pre-report estimates.  Good range and pasture conditions, fewer Mexican cattle imports, and some higher feed costs in the month likely cut into placements.  Placements totaled 1.525 million head, which was the largest since 2013 when 1.532 were placed.  The data continued the trend of placing heavier cattle.  The 640,000 placed in June that weighed over 800 pounds were the most in that weight category for that month since the data began in 1995.  The cattle in that heaviest weight class made up 42 percent of total placements, the largest percentage for a June in the data.  That has some implications for Fall marketings.  Placements weighing less than 600 pounds were the fewest (290,000 head) since 1998. 

The combination of placements and marketings left cattle on feed up about 1.2 percent from a year ago and slightly higher than the 2010-2014 average.  Cattle on feed inventory largely reflects the seasonal pattern with declining inventories as we go into mid to late summer.   Importantly, the number of cattle on feed more than 120 days has continued to decline, down 301,000 (8 percent) from last year.  This report also included the mix of steers and heifers on feed.  The number of heifers on feed was up 160,000 head from a year ago and made up 34 percent of the cattle on feed.  But there were fewer heifers on feed than in 2014. 

The markets     

I think we have hit the “dog days of summer” or are getting there as the heat ramps up and summer vacations dominate our thoughts.  It’s also a long time from July 4th to Labor Day and cattle markets often reflect that.  Fed cattle prices slid lower last week as we continue to have large production and we get past mid-month purchases for first of the month sales.  The rally in feed crop prices ended as quickly as it began on excellent corn crop ratings pushing prices lower.  Wheat prices have been low enough relative to corn to fuel talk of feeding more wheat this year.  Local calf markets have been hard hit in some areas with much lower prices than larger, more central markets.