Cattle Placement Numbers Higher Than Expected In Latest Cattle On Feed Report

May 23, 2016

By Dr. Derrell Peel,

Oklahoma State University Extension Livestock Marketing Specialist

The USDA released its May Cattle on Feed report Friday, and Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, says that while marketings and the on-feed total were pretty close to pre-report estimates, the placements were surprisingly up 7.5 percent.

Year-over-year increases in the placement numbers were especially evident in the Southern Plains.

“Texas, Oklahoma and Kansas all had big placement numbers,” Peel says. “I think there are a couple of things going on there. One is that really over the last couple of three years the Southern Plains has been lower; part of that was a drought impact - there was just less cattle available regionally, and because of tight numbers the Southern Plains just wasn’t as competitive at bringing in cattle.”

Despite the higher placement numbers, the Cattle on Feed report doesn’t change Peel’s outlook for the second half of the year.

“We knew this was coming. We saw the placements start year-over-year increases in February, now March and April,” he says. “We’ve suggested since then that we’re probably going to see year-over-year increases every month from here on for many months as we’re working our way into bigger numbers in the industry.

“In fact, this larger placement number really makes sense relative to the fact that feedlots have marketed cattle pretty aggressively - certainly in April. They ramped up marketings, pulling cattle ahead, increasing the turnover rate, and the willingness to do that hinges in part on the overall economics that supports them buying replacement cattle.”

Read the full USDA May Cattle on Feed report here, and click on the LISTEN BAR below to hear Peel’s full analysis of the report during the latest Beef Buzz.

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