Markets
Cattle inventory Increases; Impact of
Tariffs Hangs Over Markets
By Kelsey Litchfield, University of Illinois
USDA released a flurry of
reports last week, including the
mid-year Cattleinventory, the
July Cattle on Feed, and the
July Livestock Slaughter reports.
The Cattleinventory report
provides the first estimate
of the nation’s 2018 calf
crop along with an update
regarding how rapidly the
U.S. cattle herd is increasing.
USDA estimated that the
July 1 all cattle and calves
inventory was 103.2 million
head, 1 percent larger than
a year earlier. According to
Purdue University agricultural
economist James Mintert,
farmers and ranchers have
been increasing the size of
the U.S. herd since 2014,
when the herd bottomed
out at 95.7 million head.
“Although this year’s cattle and
calves inventory was nearly 8
percent larger than in 2014,
it was still 1.5 percent smaller
than the pre-ethanol era
inventory peak that occurred
in 2006,” Mintert says.
The preliminary estimate of
the U.S. calf crop was 36.5
million head, nearly 2 percent
larger than in 2017. This
marks the fourth year in a row
22 | SEPTEMBER 2018
that the calf crop was larger
than in the previous year.
“Looking ahead, heifers being
held for beef cow replacement
on July 1 declined just over
2 percent compared to last
year, which is consistent
with the notion that cattle
herd expansion is slowing
down and could even come
to a halt in 2019,” he adds.
The July 1 cattle on feed
inventory for feedlots with
over 1,000 head capacity was
11.3 million head, which was
4.3 percent larger than a year
earlier and nearly 9 percent
larger than the five-year average
for July 1. Net placements
(gross placements minus other
disappearance) of cattle on
feed during June were up 1
percent compared to 2017,
but were larger than typical
for June, rising 16 percent
above the five-year average.
According to Mintert,
marketings of fed cattle
were somewhat sluggish
during June as marketings
expressed as a percentage of
the on-feed inventory fell 3
percent below a year earlier.
“Although the July on-feed
inventory indicates near-term
fed cattle supplies will remain
plentiful, the placement
pattern of recent months
suggests marketings could be
at or near their peak now.
“Over the last four months,
placements of cattle on feed
fell 4 percent below a year ago,”
Mintert explains. “All of the
decline in placements occurred
among heavier weight cattle as
placements of cattle weighing
more than 700 pounds declined
7 percent whereas placements
of light weight cattle, those
weighing less than 700
pounds, actually rose 1 percent
compared to a year earlier.”
Looking ahead, Mintert shares
that weak feed grain prices
this fall could encourage more
placements of light weight
cattle on feed, which will
impact fed cattle marketings
in 2019 as lighter weight
placements will lead to
increasing the average number
of days cattle are on feed.
Cattle slaughter this year
has consistently been larger
than in 2017. Average daily
slaughter, which accounts for
the difference in days most
slaughter plants are operational
each month, was 2 percent
larger during January through