The latest USDA Cattle on Feed report released Friday showed larger supplies of cattle placed into feedlots was expected prior to the report. The report showed a 13.5% increase in the number of cattle placed into feedlots during the month of September 2017 as compared to the September 2016. Average expectations prior to the report were that placements would be up 7.5%. The 13.5% increase totals a 255,000 head increase in the number of cattle placed in September 2017 over last year. This year’s placements were the largest for any September since 2011. Further comparing 2017 to last year, in total, 1.4 million more head of cattle have been placed into feedlots during the first 9 months of 2017 as compared to the same period in 2016.
While placements seem to capture most of the headlines, aggressive marketing rates continue to pull cattle through the system and keep slaughter weights down. In September, cattle marketed by feedlots were 2.9% above 2016’s. There was one less slaughter day this September than a year ago, so average daily marketings were 8.0% above 2016’s. Even though the head marketed has been well anticipated, its role in the market has been key to fed cattle prices, which recently have been more than $10 per cwt. above a year ago.
A critical result of the marketing pace has been year-on-year declines in slaughter steer and heifer dressed weights. The aggressive marketings since late 2016 have been pulling animals through the feeding stage of the production system, and that has driven weights below a year ago. For the five weeks prior to October 7th, steer carcass weights have been essentially flat and did not increase seasonally. This has major implications in that it suggests we do not have a swelling of market-ready supplies sitting in feedlots.