Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry as part of the weekly series known as the “Cow Calf Corner,” published electronically by Dr. Peel and Mark Johnson. Today, Dr. Peel talks about the latest USDA Cattle on Feed report.
The latest USDA Cattle on Feed report showed a July 1 feedlot inventory of 11.304 million head, fractionally higher year over year at 100.5 percent of last year. June marketings were about as expected at 91.3 percent of one year ago. The marketings total seems low but June 2024 had the rare situation of having 2 less business days compared to last year, so average daily marketings in June were actually slightly higher compared to one year ago.
June feedlot placements were 91.2 percent of last year, slightly less than average pre-report expectations. The placement total was the smallest June total since 2016. Although the feedlot inventory has been slow to decrease, feedlots have been placing fewer cattle as feeder supplies have dwindled in recent years. The total U.S. calf crop peaked in 2018 in the most recent cattle cycle and has been declining each of the past five years. The 2024 calf crop is estimated to be another 1.5 percent smaller year over year leading to a total decline since 2018 of 8.9 percent or 3.2 million head. Figure 1 shows that average feedlot placements have decreased with the twelve-month moving-average for June at the lowest level since April 2017.
The July Cattle on Feed report included the quarterly breakdown of steers and heifers in feedlots. Steers on feed was 100.8 percent of one year ago while the heifer inventory was essentially unchanged with a scant five thousand head more heifers in feedlots compared to last year. The heifer inventory confirms that heifers continue to be placed in feedlots. As of July 1, heifers make up 39.6 percent of total feedlot inventories. Figure 2 shows cyclical variation in the heifer feedlot percentage, ranging from a low of 31 percent in April 2015 to a maximum of 40.0 percent in January 2024. The current heifer feedlot percentage is near the highest levels in the past 20 years. The heifer percentage of feedlot inventories drops below the average level (36.7 percent) during periods of heifer retention and herd rebuilding and is above average during periods of herd liquidation.
