Executive Summary

U.S. cattle on feed figures provided by the USDA were recently updated with values spanning through the end of Jan ’21. Highlights from the updated report include:

• U.S. cattle and calves on feed for the slaughter market as of Feb 1^st increased 1.5% YOY, finishing higher for the seventh consecutive month and reaching a 15 year high seasonal level. The YOY increase in the cattle on feed supply finished above average analyst expectations.
• Placements in feedlots increased 3.2% on a YOY basis throughout Jan ’21, reaching a three year high seasonal level. The YOY change in placements finished above analyst expectations.
• Marketings of fed cattle declined 5.6% on a YOY basis throughout Jan ’21, reaching a four year low seasonal level. The YOY decline in marketings was largely consistent with analyst expectations.

Additional Report Details

According to the USDA, Feb 1^st cattle and calves on feed for the slaughter market in the U.S. for feedlots with capacity of a thousand head or more increased seasonally to the second highest monthly level on record, finishing 1.5% higher on a YOY basis and reaching a 15 year high seasonal level. The YOY increase in the cattle on feed supply was the seventh experienced in a row. The 1.5% YOY increase in the cattle on feed supply finished above average analyst expectations of a 0.8% increase. The month-over-month increase in the cattle on feed supply of 1.2% was greater than the ten year average January – February increase of 0.5%.

Placements in feedlots finished higher on a YOY basis for the second consecutive month throughout Jan ’21, increasing by 3.2% and reaching a three year high seasonal level. The 3.2% YOY increase in placements finished above average analyst expectations of a 0.2% decline. YOY increases in placements were led by those weighing 700-799 pounds (+7.5%), followed by placements weighing under 600 pounds (+5.1%) and 800 pounds or more (+3.0%). Placements weighing 600-699 pounds (-3.3%) declined throughout the month.

Total placements in feedlots declined 0.9% on a YOY basis throughout the ’19-’20 production season, reaching a four year low level. ’20-’21 YTD placements have declined by an additional 4.6% on a YOY basis throughout the first third of the production season, despite the most recent increase.

Cattle placements weighing under 700 pounds increased 0.6% on a YOY basis during Jan ’21, reaching a seven year high seasonal level. The YOY increase in cattle placements weighing under 700 pounds was the first experienced throughout the past four months. Cattle placements weighing under 700 pounds finished 0.2% above previous year levels throughout the ’19-’20 production season however ’20-’21 YTD placements weighing under 700 pounds have declined by 5.9% on a YOY basis throughout the first third of the production season, despite the most recent increase.

Cattle placements weighing 700 pounds or more increased 5.1% on a YOY basis during Jan ’21, reaching a three year high seasonal level. Cattle placements weighing 700 pounds or more declined 1.6% on a YOY basis throughout the ’19-’20 production season while ’20-’21 YTD placements weighing 700 pounds or more have declined by an additional 3.4% on a YOY basis throughout the first third of the production season, despite the most recent increase.

Marketings of fed cattle declined 5.6% on a YOY basis throughout Jan ’21, reaching a four year low seasonal level. The YOY decline in marketings was the third experienced throughout the past four months and the largest experienced throughout the past eight months on a percentage basis. The 5.6% YOY decline in marketings was largely consistent with average analyst expectations of a 4.9% decline. Marketings of fed cattle had reached record low levels over the months of April and May as slaughterhouses slowed or closed operations due to outbreaks of COVID-19, prior to rebounding throughout the past several months of data.

’19-’20 annual marketings of fed cattle declined 2.9% on a YOY basis from the 11 year high level experienced throughout the previous production season. ’20-’21 YTD marketings have declined by an additional 1.7% on a YOY basis throughout the first third of the production season.