The February Cattle on Feed report from the USDA showed a Feb. 1 feedlot inventory of 12.1 million head, 101.5% of one year ago. January placements were 2.017 million head, up 3.2% year over year.

For the final quarter of 2020, beef production was lowered 80 million pounds on fewer-than-expected cattle slaughtered in December. This decline was particularly driven by fewer steers and heifers in the slaughter mix. As a result, 2020 beef production is forecast at 27.2 billion pounds, almost unchanged from 2019 production levels.

The current outlook communications for the cattle and beef markets in 2021 are commonly optimistic – bullish. The underlying market fundamentals support this position.

The Cattle Inventory report provides lots of information but does not answer one important question: What is the inventory of feeder cattle available to be placed in feedlots for finishing?

The latest Cattle on Feed report was released Jan. 22. Included in this report were placements and marketings for December 2020 and the on-feed total for Jan. 1, 2021.

Recent USDA reports provide a picture of the hay situation across the U.S. Dec. 1 hay stocks were down a scant 0.6% year over year for the entire U.S.

For the final quarter of 2020, beef production was raised 15 million pounds on greater expected non-fed cattle slaughter that was partially offset by lower average cattle carcass weights. As a result, 2020 beef production is forecast at 27.2 billion pounds.

U.S. beef trade is stabilizing as the ripple effects of the initial COVID-19 disruptions continue to fade. The latest beef trade data for November shows that monthly exports were up 13.2% year over year.

The cattle industry, like everyone else, is more than ready to move past 2020 and into a new year. While the industry will start the year with a new slate, there are numerous factors in place that will shape markets for, at least, the first few months of 2021. Cattle markets face a mix of opportunities and challenges as the new year begins.

On Dec. 18, the USDA Cattle on Feed report was released. The trade expectations told a consistent story of lower placements and marketings from a year ago.