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Cattle on Feed Report 01/21 14:06


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/.