Drought Continues to Drive Feedlot Placements Higher in August

– James Mitchell, Livestock Marketing Specialist, University of Arkansas

The September 1st Cattle on Feed report was released on Friday and showed feedlot inventories totaling 11.3 million head. Importantly, the report notes this was the second largest September feedlot inventory since the report began in 1996. Drought continues to play a key role in the movement of cattle into feedlots this year.

Drought dynamics add another layer of complexity to feedlot inventory and placement numbers. Pre-report expectations for feedlot placements ranged from 6.8% lower to 0.9% higher year over year, suggesting that last month’s placement total was anyone’s guess. August feedlot placements totaled 2.11 million head, the highest August total since 2011 and 0.4% higher year over year. Examining placements by weight category and region provides a detailed picture of how the drought has pressured producers.

Feedlot placements of cattle weighing less than 700 pounds (calves for short) totaled 750 thousand head or 4.9% higher year over year. In Texas, August placements of calves totaled 290 thousand head and were 11.5% higher compared to August 2021. Similarly, August placements of calves in Kansas totaled 165 thousand head and were 6.5% higher year over year. Feedlot placements of cattle weighing less than 700 pounds were 14.3% lower in Colorado and were even with year-ago totals in Nebraska. The data suggest that producers in the Southern Plains were likely forced to early wean calves this year.

Feedlot placements of cattle weighing more than 700 pounds (feeders for short) totaled 1.36 million head or 1.9% lower year over year. Placements of heavier feeder cattle have run below year-ago levels since May. Seasonally, placements of cattle weighing more than 700 pounds tend to be highest in May, August, and September. Looking back at the drought map for April and May suggests that opportunities for grazing summer stockers were severely limited in the Southern Plains because of drought. Tighter supplies of heavy feeder cattle also change feedlot inventory and slaughter cattle dynamics for late 2022 and early 2023.

Regionally, feedlot inventories in Texas, Oklahoma, Nebraska, Minnesota, and Iowa are all above or even with year-ago levels. Inventories in Colorado and Kansas are currently below levels from the same time last year. As we have mentioned in previous articles, the longer it takes for feedlot inventories to dip below year-ago levels, the more significant the eventual decline.