Cattle on Feed Report     01/21  14:06

Jan. 1 Cattle on Feed Up 1%

By DTN Staff

                      USDA Actual   Average Estimate       Range
On Feed Jan. 1            101%          99.7%        99.5-100.0%
Placed in December        106%         101.8%       100.0-104.7%
Marketed in December      100%         100.9%       100.2-102.1%

This article was originally published at 2:06 p.m. CST on 
Friday, Jan. 21. It was last updated at 2:34 p.m. CST on Friday, 
Jan. 21.

**

OMAHA (DTN) -- Cattle and calves on feed for the slaughter 
market in the United States for feedlots with capacity of 1,000 
or more head totaled 12.0 million head on Jan. 1, 2022. The 
inventory was 1% above Jan. 1, 2021. This is the second-highest 
Jan. 1 inventory since the series began in 1996, USDA NASS 
reported on Friday. 

The inventory included 7.36 million steers and steer calves, 
down 1% from the previous year. This group accounted for 61% of 
the total inventory. Heifers and heifer calves accounted for 
4.68 million head, up 2% from 2021.

Placements in feedlots during December totaled 1.96 million 
head, 6% above 2020. Placements were the highest for December 
since the series began in 1996. Net placements were 1.91 million 
head. During December, placements of cattle and calves weighing 
less than 600 pounds were 510,000 head, 600-699 pounds were 
470,000 head, 700-799 pounds were 450,000 head, 800-899 pounds 
were 333,000 head, 900-999 pounds were 105,000 head, and 1,000 
pounds and greater were 95,000 head.

Marketings of fed cattle during December totaled 1.86 million 
head, slightly above 2020. Marketings were the second highest 
for December since the series began in 1996.

Other disappearance totaled 54,000 head during December, 10% 
below 2020.

DTN ANALYSIS 

"Friday's Cattle on Feed report is a direct representation of 
how drought and limited feed resources throughout the U.S. have 
affected cattlemen," said DTN Livestock Analyst ShayLe Stewart. 
"Seeing the 6% year-over-year increase in placements seems 
nearly impossible given that placements have been higher now in 
all the last three reports (higher on the January, December and 
November reports). But with wheat conditions unsuitable for 
grazing and drought starkly limiting winter grazing, where else 
were the cattle to go?

"But while it's baffling to see placements up 6% from a year 
ago, when analyzing the short-term and long-term trajectories of 
the market, cattlemen shouldn't become overly concerned given 
where the market is in its current cattle cycle. When closely 
studying the COF report, you'll note that the heightened 
placement numbers came from feeders weighing anywhere from under 
600 pounds up to 899 pounds. The under-600-pound weight group 
saw a 50,000-head jump from a year ago, feeders weighing 600 to 
699 pounds jumped 35,000 head from a year ago, feeders weighing 
700 to 799 pounds increased by 25,000 head from 2021 and feeders 
weighing 800 to 899 pounds increased by 14,000 head. But for the 
weight groups of 900 pounds to 1,000 pounds or more, the numbers 
were either steady or less than a year ago.

"For the short term, this will likely have a negative effect on 
the markets early next week, as it's the largest placements have 
been for December since 1996. Whenever there is a new record, 
the market tends to back off in hesitation. But after absorbing 
the report, feedlots and cattlemen alike will realize that these 
feeders aren't going to pressure the markets anytime soon, as 
they need time on feed.

"For a deferred perspective, I don't find Friday's data 
overwhelming, as we know there are significantly fewer beef cows 
in our system producing calves for the market. If we were in a 
different scenario where our beef cowherd was growing, then the 
market may have trouble with throughput. But with demand as 
elevated as it is both domestically and internationally, the 
market will likely absorb these cattle with no trouble, 
especially if corn prices stay high, as feedlots will be 
marketing fats sooner rather than later."

**
DTN subscribers can view the full Cattle on Feed reports in the 
Livestock Archives folder under the Markets menu. The report is 
also available at https://www.nass.usda.gov/.