Market Reports

The USDA Cattle on Feed report was released Friday, and the news was neutral to longer term bearish. Marketings matched pre-report expectations; on-feed inventories were slightly heavy but again close to expectations, while placements were above the highest estimate for the range of expectations.

In October and November, dry conditions persisted in the Southern Plains, stressing pasture and forage supplies and likely directing calves that might have otherwise been placed on pasture into feedlots.

The National Agricultural Statistics Service released a report Jan. 31 detailing the total inventory of cattle and calves in the U.S. as of Jan. 1, 2018.

Christmas shoppers are familiar with Black Friday, the day when spending is strong enough to put many stores’ annual budgets finally into the black.

A similar principle has applied to cattle markets, except the calendar is flipped. Strong cattle sales in the spring must be strong enough to balance the trend of dropping prices in the fall. And in recent years, that drop has slid into a problematic trend.

Cattle on feed inventories continue to remain above year-earlier levels, and placements continue to reflect the increasing cattle inventory. The number of cattle on feed in feedlots with a capacity of 1,000 head or greater on Nov. 1, 2017, was 6 percent above Nov. 1, 2016, and 5 percent above Nov. 1, 2015.

Continued growth in beef production in 2018 is likely to pressure cattle and beef prices. Cattle producers have a number of economic conditions to watch that will indicate the impact of factors they cannot control and that will have implications for those factors they do control.