January's Cattle on Feed Report

The January Cattle on Feed Report was released last Friday and feedlot inventories are down slightly from a year ago. USDA Livestock Analyst Shayle Shagam says that feedlots are cutting back on placements because they are losing a lot of money on fed cattle sales.
Shagam: “Right now the benchmark USDA cattle price for the five areas for steers of all grades is in the low $120s — a year ago at this time producers were receiving about $160. They’ve seen the price of their output the fed cattle come down. They have very very poor margins — even though there has been moderating grain prices. They really need to see the price of those feeder calves coming down and one way of doing that is to reduce the demand — in other words the number of feeder calves which you are willing to place.”
He continues with some more of the key numbers in the report.|
Shagam: Working through the numbers, if we look at the number of cattle on feed in U.s. feedlots with a capacity of 1,000 head or greater on January 1st; just under 10.6 million head were on feed, which was fractionally below 2015 numbers. Feed lots placed about 1.5 million head during December which was about 1 percent below a year ago.”
On Friday, USDA NASS will be releasing their January 1st Cattle Report for Total Cow inventory which should reveal whether there has been an increase in total cow inventory from last year.