USDA’s Cattle on Feed Numbers Stir Up Market Expectations

There have been some interesting developments from the most recent cattle market report from the United States Department of Agriculture (USDA). This report, which assessed data on Jan. 1, 2024, compared to the previous year, has been a central point of interest in the cattle market for the last few days. The on-feed numbers increased by 2% year over year, and there was a modest drop in cattle placements and a slight decline in marketing numbers throughout December.

The “Cattle on Feed” report, released monthly by the USDA, estimates the number of cattle fed for slaughter in commercial feedlots. This data, which includes cattle numbers, placements, and marketings, provides information about current and future beef supply, influencing market prices. It’s crucial for farmers, feedlot operators, and commodities investors for decision-making on production, marketing, and investment.

December saw a decrease in feedlot placements and marketings compared to 2022, with 1.7 million head and 1.73 million head, respectively. The net placements stood at 1.64 million head. Detailed placements by weight included:

• Less than 600 pounds: 440,000 head
• 600-699 pounds: 410,000 head
• 700-799 pounds: 380,000 head
• 800-899 pounds: 279,000 head
• 900-999 pounds: 110,000 head
• 1,000 pounds and greater: 85,000 head

To give you some perspective, the average estimate from analysts for cattle on feed at the start of this year was placed at 102.2% compared to last year’s figure, which would have put the total cattle on feed numbers at 11.94 million as of Jan. 1 compared to 11.6 million in January 2023.

A particularly notable aspect of the USDA report in recent months has been cattle placement numbers. This latest report follows suit. Despite a projected decrease in placements from last year, exactly how much of a decrease this will be is being closely watched, as it will have a significant impact on the market trend. An estimated 95.4% placement level equates to 1.72 million head, the lowest level since the August report. Placement numbers at this level will indicate the placement peak for the marketing year has come and gone. This sets the stage for a return to normal spring placement levels.

The January cattle feed report revealed:

• Actual USDA report for Jan. 1 on feed: 102%, compared to an average estimate of 102.2% within a range of 101.4% to 102.5%
• December placements as per USDA: 96%, against an average estimate of 95.4% within a range of 91.5% to 98.0%
• December marketings according to USDA: 99%, versus an average estimate of 99.2% within a range of 98.2% to 100.7%