Fewer livestock, but more on pasture

The April cattle on feed report estimates feed stocks at 11.82 million head, up 1.49 percent from a year ago. Stocks of feedlots continue to decline persistently, despite declining cattle numbers. The latest report included the quarterly breakdown of feedlot inventories by gender.

The number of steers fed on April 1 was 7.266 million head, up 1.7 percent year-over-year, and the number of heifers in feed inventory was 4.555 million head, up 1.1 percent from last year. Heifers made up 38.5 percent of total feed stocks, up from 39.7 percent in January. While the percentage of heifers on feedlots is still above the average for the past decade, the decline from January to April is an encouraging sign that heifer feeding may be slowing. During the rapid expansion of the livestock herd in 2015-2017, the percentage of heifers in feed stocks fell below 34 percent and remained below 33 percent on average for ten quarters in a row, i.e. two and a half years. It is expected that heifer feeding will decrease significantly further in the coming months.

Feedlot placements

Pasture placements fell 12.3 percent year-on-year in March, a larger drop than expected. In fact, feedlot placements have been declining for many months in response to reduced feeder cattle supplies. Figure 1 shows that average monthly placements on feedlots (12-month moving average) in March were at their lowest level since April 2017. The total number of placements in the last six months (October-March), which would account for the majority of livestock currently on pasture land is 2.3 percent lower than in the same period a year ago.

Marketing is at a standstill

How then can feed stocks be above the level of a year earlier, as they have been for the past seven months? The answer is that feedlot marketing rates have fallen even faster than placement rates. Fewer livestock stay on pasture longer. According to the latest cattle on feed report, March marketing was down 13.7 percent year over year, while monthly marketing was just 14.4 percent of March 1 inventory. Figure 2 shows average (twelve-month moving average) feedlot marketing as a percentage of livestock fed. Average feedlot marketing in March was 15.4 percent of feedlot inventory over the past twelve months, which is below 15.5 percent for the first time according to 1997 data.

Drop in feedlots

Feedlots have an incentive to keep inventories as close to capacity as possible. One way is to slow the turnover rate, turning fewer livestock into larger supplies. The result is more feeding days and a higher carcass weight. Steer carcass weights have averaged 25 pounds heavier year on year over the past four weeks, while heifer carcasses are more than 21 pounds heavier. There are limits on the amount of feedlots that could slow marketing, but feedlots are expected to push carcass weight as far as possible in the coming months. Feed supplies are expected to decline in the coming months, despite moves to delay the inevitable.