– Kenny Burdine, Livestock Marketing Specialist, University of Kentucky
Friday May 21st, brought USDA’s May Cattle on Feed report, which estimates feedlot inventory in feedlots with one-time capacity over 1,000 head. Total feedlot inventory on May 1st was estimated at 11.7 million head, which was 5% greater than May 1st of last year. Like most every report being released, comparison of data to last year is difficult due to COVID impacts in 2020. The May 2021 estimate was actually just under 1% lower than 2019, which is probably a better comparison. Seasonally, on-feed inventories tend to decrease through summer, before increasing in fall / winter as spring born calves start hitting the markets.
Comparison of April placements and marketings to last year is also quite difficult. April 2021 placements were up 27% year-over-year, mostly because placement were so low in 2020 due to the pandemic. However, placements did come in higher than pre-report estimates and I think that could have been partially due to dry weather in many parts of the US. Drought tends to push cattle into feeding programs sooner than usual as grazing conditions deteriorate. As Josh noted in last Friday’s video (see below), the percent of pasture rated poor and very poor, is the highest it has been since the start of the series in 1995.
April marketings came in 33% above 2020 levels, which was right in line with expectations. Marketing patterns will also be interesting to watch as we move through 2021. Holding everything else constant, high feed prices tend to encourage cattle to move from feedlots to processors more quickly. Slaughter levels have been running quite high recently and Saturday slaughter is suggesting that packers are pushing volume. I placed a chart of dressed steer weights below the cattle on feed chart this week. Given where feed prices are, I would expect weights to pull back, but I can’t really say that we are seeing that yet.
While this week’s article was focused on the May Cattle on Feed report, a lot of related issues were discussed in the video that Josh, James, and I recorded on Friday afternoon. Josh discussed weather and grazing conditions, James discussed corn markets and impacts, and I discussed management considerations given current market conditions. As we said with our first quarter video, we hope you find this to be a useful addition to our weekly newsletter. Be sure to watch the video embedded below and reach out to us with any questions or feedback.