More Feeder Cattle, but Where Are They? Peel Offers InsightMon, 08 Feb 2016 11:12:05 CST
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow/Calf Corner newsletter.
The annual Cattle report estimated that total cattle inventories in the U.S. were up 3.2 percent year over year at 92.0 million head. From various inventories categories we can calculate an estimated supply of feeder cattle outside of feedlots. For January 1, 2016, this estimate is 25.9 million head, up 5.3 percent from one year ago. This is a 1.31 million head increase in the estimated feeder supply. This compares to the 2.3 percent year over year increase in the 2015 calf crop, up 780 thousand head. The ratio of the estimated feeder supply to the 2015 calf crop is 75.5 percent, up slightly from last year and indicates some increase in carryover of feeder cattle from 2015 into 2016. That leads to the question of where those cattle are.
In general, the states that typically have large feeder supplies on January 1 got bigger with these numbers. The exception was Texas, which has the largest estimated feeder supply among states but was down 3.4 percent on January 1, from one year ago. Other major feeder supply states, in rank order including Oklahoma, Kansas, Nebraska, Missouri, California, Iowa and South Dakota all have more than one million head of feeders and all increased from 2015 levels. Increased feeder supplies in those states accounted for 59 percent of the total increase in U.S. feeder supplies. Feeder supplies were also up significantly in Colorado, Kentucky and Tennessee.
A bit of a surprise was the sharp increase in feeder supplies in Montana, typically a state with little carryover of feeder cattle through the winter. The estimated feeder supply in Montana was up 139 thousand head, resulting in the highest feeder supply in the state since 2010. The ratio of feeder supply to calf crop in Montana, which has averaged 32 percent the last ten years, is estimated at 37.2 percent for 2016. Additionally, Montana, which typically has a small cattle on feed inventory, posted a 75 percent year over year increase in cattle on feed to the highest level since 2004. Similarly, South Dakota, the seventh largest cattle feeding state, posted the highest January 1 on feed total in data back to 1965. Missouri, though a small feedlot state, also posted the highest on-feed total since 2000.
In summary, the biggest increases in feeder supplies were in the Plains states from South Dakota south through Oklahoma plus Colorado and Iowa. Kentucky and Tennessee also had sharp increases in January 1 estimated feeder supplies. Kansas stands out with notable increases in both feedlot inventory and estimated feeder supplies. For several months there has been concern that reduced feedlot placements was resulting in a buildup of feeder supplies in the country. The estimated feeder supplies do indicate some increase in carryover feeder cattle from 2015. Most of these are in places that often have large supplies of stocker or backgrounding cattle but also higher feeder and/or feedlot inventories in less typical places, such as Montana.
The question of how many of those carryover feeder cattle are big feeders that will need to be marketed soon in 2016 is less clear. The January 1 inventory of steers over 500 pounds was up 4.4 percent. However, that total includes the January 1 inventory of steers on feed which was up 3.1 percent. Feedlot placements of cattle over 800 pounds has been up has been up 6.2 percent the last four months despite overall feedlot placements being down 4.7 percent over the period, compared to a year earlier. The implication is that many of the big steers are already in feedlots. The 2016 estimated feeder supply included a January 1 inventory of calves under 500 pounds that was up 3.3 percent year over year. The overall implication is that, while there are more feeder cattle on the ground in 2016, it does not appear that immediately available supplies of heavy feeder cattle are likely to be especially burdensome to feeder markets.
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