Cattle placements on the rise as the industry enters recovery phase

The cattle industry seems to be shrugging off some of the disruptions brought by the COVID-19 pandemic with cattle placements and marketings on an upward swing as the industry approaches its seasonal peak, according to the cattle on feed report from the U.S. Department of Agriculture released for the month of October.

Feedlot placements typically peak in October. Those placements will be tabulated in the November Cattle on feed report.

September’s feedlot placements totaled 2.23 million head, 6% above the year-ago placements.

“September marks the fourth consecutive month of feedlot placements above year-ago levels,” James Mitchell, assistant professor and agricultural economist for the University of Arkansas System Division of Agriculture, said. However, since the beginning of 2020, “total placements through September were 3% below 2019 levels for the same period.”

Feedlot placements were 11.72 million head as of Oct. 1, which was 4% above a year ago. Mitchell said that October marked the third consecutive month of “on feed” inventories above year-ago levels.

September marketings of cattle were 6% above a year ago, although Mitchell noted that September 2020 had one more business day than September 2019.

One other factor weighing on the industry is drought in the southern plains.

“The drought will likely play a role in determining the destination of calves sold this fall, specifically, the number of lightweight feeders placed in feedlots this fall relative to those going to a winter backgrounding or grazing program,” Mitchell said.

He said if weather undermines growth of winter grazing, “we might see impacts on stocker cattle demand, which places downward pressure on regional feeder calf prices.

“If there is not adequate wheat pasture, calves would potentially be placed directly in a feedlot or an alternate backgrounding program,” Mitchell said.

Mitchell said that “as of Oct.19, 35% of pasture was in poor or very poor condition in the southern plains.”

Beef is a billion dollar cash industry in Arkansas, according to the Arkansas Farm Bureau. It is consistently a top five ag sector in the state each year and there are more than 20,000 cattle farms in the state.