Cattle on feed up 2 percent

Cattle and calves on feed in U.S. feedlots with capacity of 1,000 or more head totaled 10.8 million head on June 1, up about 2 percent compared to a year earlier.

Natzke dave
Editor / Progressive Dairy

At 7.06 million head, Kansas, Nebraska and Texas feedlots held nearly 65 percent of the U.S. total, according to the USDA’s Cattle on Feed report, released June 24.

May placements totaled 1.88 million head (1.81 million net), up 10 percent from a year earlier. Placements of cattle and calves weighing less than 600 pounds were 305,000 head; 600-699 pounds were 250,000 head; 700-799 pounds were 479,000 head and 800 pounds and greater were 850,000 head.

May fed cattle marketings totaled 1.79 million head, 5 percent more than May 2015. Other disappearance totaled 74,000 head during May, 4 percent less than 2015.

Beef in cold storage

Total frozen beef stored in all warehouses as of May 31 was estimated at about 446.7 million pounds, according to USDA’s monthly Cold Storage report, released June 24. The total is down 1 percent from April 30, and down 6 percent from May a year earlier.


Boneless beef inventories were estimated at 410.4 million pounds, down 2 percent from April and 6 percent less than a year ago. Boneless beef includes all boxed boneless beef, such as ground beef, roasts, steaks, loins, strips, rounds and trimmings, but excludes variety meats.

Frozen beef cuts were estimated at 36.3 million pounds, up 4 percent from April, but down 7 percent from May 2015. Beef cuts include all boxed primal beef cuts, bone-in.

May beef production increased

May 2016 beef production, at 2.03 billion pounds, was 5 percent above the previous year, according to USDA’s latest Livestock Slaughter report, issued June 23.

Cattle slaughter totaled 2.51 million head, up 6 percent from May 2015. The total includes about 214,600 dairy cows.

Beef steer and heifer slaughter totaled 2.01 million head in May 2016, up from 1.91 million in April and 1.92 million in May 2015.

Beef cow slaughter totaled 209,800 in May 2016, up from 199,300 head in April and 178,300 in May a year ago.

May 2016 contained 22 weekdays and four Saturdays. May 2015 contained one less weekday, but one more Saturday. Both contained one holiday.

At 861 pounds, average steer carcass dressed weights were down 13 pounds from April, and about 5 pounds lighter than May 2015. Heifer dressed carcass weights averaged 796 pounds, down 17 pounds from April, but 4 pounds heavier than a year earlier.

Cow (dairy and beef cows, combined) dressed carcass weights averaged 648 pounds, unchanged from April and 5 pounds lighter than a year ago.

Through the first five months of 2016, steers slaughtered under federal inspection were estimated at 6.44 million head, about 431,600 more than January-May 2015. Heifer slaughter totaled 3.07 million, down more than 110,000 head. Beef cow slaughter totaled 1 million head, up about 57,000 from a year earlier.

Download the USDA Livestock Slaughter report.

Beef margins started June weaker

Beef margins fell under further pressure to start June, as cattle price declines combined with higher feed costs, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging LLC. Given current costs against forward fed cattle prices, margins remain negative through spring 2017 marketing periods.

The cattle market has been pressured by increased beef production, running 3.2 percent ahead of last year, as well as weakness in cutout values, which also trail year-ago levels.

While strong demand has helped prices for choice middle meat cuts hold up relatively well, the select market has been noticeably weaker. Choice rib and loin values are only about 7-8 percent lower than last year, while select end cuts are down as much as 20-25 percent from 2015. The choice-select spread is now trading at its highest premium since May 2004.

Meanwhile, USDA’s June World Ag Supply and Demand Estimates report was considered neutral to somewhat bullish for corn prices.

Visit the Margin Manager website.

Dave Natzke