The latest Cattle on Feed report from the USDA’s National Agricultural Statistics Service (NASS), released last Friday, shows a 3% year-over-year increase in the number of cattle on feed. This rise is primarily due to slower marketing in recent months. From January through June, daily average marketings were at 87,000 heads, which slightly decreased to 83,000 heads from July through November.
In the final quarter of 2023, the trend for cattle on feed for over 120 days generally followed the expected seasonal decrease but remained notably higher than the previous year. Specifically, there was a 4% increase in October and a 6% increase in both November and December.
Feedlot placements were at the higher end of the anticipated range before the report’s release, achieving 98.1% of the figures from the previous year. In major cattle feeding states such as Colorado, Kansas, Nebraska, and Texas, placement numbers varied compared to the previous year, resulting in a net decrease of 20,000 head across these states. The total cattle on feed exceeded 12 million head, with these four states accounting for 75% of the total.
As of December 1, Colorado and Nebraska, along with Arizona, were the only states with inventories below the previous year’s levels. In contrast, Kansas and Oklahoma saw inventory increases of 7% and 16%, respectively.
According to the Daily Livestock Report’s analysis, while this year’s total inventory has aligned with the five-year average, peaking in December, the trend might change in early 2024. If marketing does not rise, the pattern could mirror that of 2022, with higher numbers in the first half of the year and lower numbers in the latter half. This shift could result in fed cattle prices peaking in the fourth quarter of 2024, rather than in the second quarter.
Throughout the year, both slaughter and beef production have consistently fallen short of the previous year’s levels, contributing to the ongoing high wholesale beef prices. Despite the reduction in slaughter, the number of cattle placed on feed has not seen a corresponding decrease, leading to a transition in feedlots from being down 4.5% year-over-year in April to a +2% on-feed status in December.
