Placements Lower than Year-Ago, But Number of Cattle on Feed Still Historically Large

Placements into feedlots during March were lower than they were during March of 2017. While this was anticipated, it breaks a run of 12 consecutive months of placement increases. Placements were 9.3 percent lower than during March 2017. This is not an indication of fewer total cattle supplies, but rather are a confirmation of the change in feedlot timing in recent months. Larger placements in recent months have built up feedlot inventories and decreased the number of cattle available to be placed during March and April.

Even though placements were lower than last year, the number of cattle on feed is still a historically large number. At 11.73 million head of cattle on feed, this is the largest April 1 total since 2006 and the second largest on record since data began to be collected in 1996. Again, the placements number is a little misleading. It does not imply there are fewer cattle, it just implies that a lot of cattle entered feedlots sooner. This is evident by the large number of cattle on feed.

The marketing rate was also lower, though this was influenced by there being one less marketing day during March of 2018 than March of 2017. However, marketing rates have underwhelmed as of late and were lower during March of 2018 than the same time period of 2017 and 2016.

The last few months have seen a pretty sharp run-up in the number of cattle on feed for longer periods of time. As shown in the figure above, the number of cattle on feed longer than 120 days is significantly above 2017 levels – about 23 percent higher. This number was relatively low in 2017 when feedlots remained current. This year, feedlots have more cattle that are market ready or near market-ready which has led to lower price expectations for the summer months.

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