The cattle on feed report for June indicates a drop in the total number of cattle in feed. Total number of cattle on feed was 2% higher than a year ago in January, April, and May, but has since rebounded slightly. The number of cattle on feed for 90 days or longer is down sharply since June.
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135,000 cattle and calves placed on feed in June
The number of cattle and calves placed on feed in the U.S. dropped by 135,000 head in June, a 2% decline from the same month last year. The total number of cattle on feed was 11.3 million head on July 1, down from 11.34 million head on July 1, 2021. Of those cattle, 6.90 million were steers and 4.45 million were heifers.
While placements in feedlots were down this past June, the midyear report showed higher placements in the lighter weight divisions. Placements in feedlots over the past three months were down 4% compared to the same period last year. This drop could mean tighter supplies in the fall.
Heifers up 4.3 million from last year
The number of beef heifers entering the herd decreased by 2.3 million in July, but the number of dairy cow replacement heifers increased by 2.3 million. While this is a drop from last year’s high of 35.6 million heifers, it’s still up above last year’s low of 4.2 million.
The USDA National Agricultural Statistics Service recently released its midyear Cattle report, which provides an overview of the U.S. cattle herd, as well as indications of how many heifers producers plan to keep. The herd had grown to 103.2 million head by July 1, a modest increase from last year. At the same time, the number of beef cows rose by one percent, to 32.5 million head.
The number of beef breeding heifers on feed increased by 3.8 percent in July, the most since 2017. Heifers accounted for 38% of feedlot cattle at the beginning of this year, compared with 31% to 33% during the last expansion of the cattle cycle. With fewer steers on feed, producers expect cattle prices to remain fairly steady over the coming months.
Beef cow numbers down just under 1% from 2020
According to the latest USDA-NASS data, the U.S. cowherd is shrinking, but the decline is relatively small so far. The mid-year figures show that the number of beef cows on feed is down just under 1% from July. The decrease is expected to improve calf prices because the calf crop will be smaller than expected next year. However, it is important to note that most of the culling of cows takes place during fall and early winter. Regardless, the reduction in calf numbers is a concern for Texas cattle producers.
While the cattle on feed inventory has fallen over the past year, the number of cattle marketed in June and July was up slightly. Similarly, cattle slaughtered during these two months grew by about 1%. But the overall trend is still pointing toward another reduction in the number of cattle on feed.
Increase in number of beef replacement heifers
According to the USDA’s economic research service, the number of beef replacement heifers in feedlots increased by 7.6% from January to June of last year. This number was the lowest level of replacement heifers since 2014. The number of heifers entering feedlots is the same as the number of heifers on beef farms on January 1, 2020. This indicates that producers have limited interest in expanding their cowherds.
Approximately 7.033 million steers and heifers over 500 pounds were on feed on July 1, 2020, down 1.5% from the same time last year. The number of beef replacement heifers and milk replacement heifers on feed was down 0.3% year-over-year. The number of steers and bulls was even year-over-year, while the number of calves under 500 pounds was down by nearly 200,000.
Prices projected to average 8-12 percent higher year over year
Cattle on feed prices are projected to rise 8 to 12 percent this year, resulting in a price increase of eight to 12 percent. Although cattle prices have been increasing for the past several months, they have remained flat since the beginning of June. This is due to the lack of cattle movement and higher input costs. Cattlemen should realize that there are still opportunities in the market.
With tighter supplies and strong demand for beef, cattle prices are expected to rise modestly this quarter. However, this price increase will be offset by higher input costs, including feed grains and supplements. These rising costs will impede profitability, though. Despite this, cattle futures have reacted positively to the situation. The price of feeder cattle closed on contract highs this week.
