Record-high April 1 feedlot inventories in this article last month. Estimates from the May cattle on feed report, released May 19, continue to show record high feedlot inventories. May 1 feedlot inventories totaled 11.967 million head, a record for the month and 2% higher than last year.
Like last month, the biggest surprise in the report was April feedlot placements, totaling 1.809 million head or 1% lower year over year. Placements of lighter weight calves and heavier feeder cattle were both similar to last year. Most analysts expected April placements to be closer to 3% lower than last year.
Drought in the Southern Plains is likely the most significant factor contributing to feedlot placements that are comparable to 2021. At the same time, feedlots are anticipating higher feed prices and tighter cattle supplies and are choosing to place a more aggressive pace to start the year (see table below).
To examine how feedlot placements compare to previous years, I’ve calculated monthly cumulative feedlot placements as a percent of January 1 feeder cattle supplies. As of April, the table shows that 30% of available January 1 supplies have been placed on feed, a 1.6% increase compared to last year. Overall, the table is supportive of the idea that drought pressure is pushing more cattle to feedlots.
As we move through the year, spring-born calves will add to available feeder cattle supplies. For this reason, it would not be appropriate to extend this analysis through the rest of the year. Instead, the July 1 Cattle Inventory report will provide us with a better estimate of feeder cattle supply. The expectation is that feeder cattle supplies will continue to tighten.
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