A record number of cattle were in U.S. feedlots at the beginning of the month.
The number of cattle in large U.S. feedlots on Sept. 1 — 11.1 million — is 6 percent above a year earlier and the highest since the data series began in 1996, USDA National Agricultural Statistics Service reported on Friday.
It’s the fourth consecutive month of all-time monthly highs going back to the start of the series, and the May 1 inventory was the second-largest for the month.
Most of those increases in inventory are a result of placing lighter weight cattle, Derrell Peel, livestock marketing specialist with Oklahoma State University Extension, told Capital Press.
Cattle placed in feedlots in August were up 7.4 percent year over year and largely consisted of cattle under 700 pounds. Those lightweight cattle accounted for about 37 percent of the roughly 2 million placed, according to NASS data.
Cost of gain at the feedlot is fairly attractive at about 76 cents to 80 cents per pound in the Southern Plains, and feedlots are willing to feed cattle longer, Peel said.
Rations are inexpensive with large supplies of feed grains. Hay is going to be more expensive across the board this year, but hay or forage only make up 5 to 8 percent of the feedlot ration, he said.
The lighter weight cattle are also a little more attractively priced than heavier weight cattle. The Oklahoma price for a 475-pound calf works out to about $807 a head, compared to about $1,200 for a 750-pound animal, he said.
“Feedlots have been willing to load up on these lighter weight cattle,” he said.
Dry conditions in some areas of the country have had feeder cattle moving to town earlier than normal. Those cattle would typically enter feedlots in the fall, he said.
“It’s changing the timing more than anything, and will partially offset the fall run-up in on-feed numbers,” he said.
A 575-pound calf is going to spend about 8 months in the feedlot, he said.
With lighter weight placements since May, “the supply of fed cattle coming to market may be relatively tight for the remainder of the year,” he said.
Markets have seen a price rally on fed cattle in the last week or two, and there’s probably a little more of that ahead, he said.
Marketings of fed cattle out of feedlots in August at 1.98 million head were only slightly above year-ago levels. But feedlots are staying current, marketing them as they’re ready, he said.
Beef production year to date is 3 percent higher year over year. But it’s probably going to go higher in the fourth quarter to be up 3.5 percent for a record 27.1 billion pounds in 2018. Beef production is going to be up well into 2020, he said.