Largely in line with expectations, Friday’s Cattle-on-Feed report estimated October 1 feedlot inventories virtually unchanged from last year. On-feed numbers continue to run very close to 2023 levels despite the fact that the cowherd and calf crop are smaller. The combination of high cattle values and lower feed prices continue to encourage longer feeding periods. Increased live cattle imports are also a contributing factor and will be discussed in a bit more detail later.
September placements came in a bit higher than expected, running 1.9% below the same month last year. While placements have bounced around a lot this year, they have tended to exceed expectations. Even aggregating over the last six months (April through September) placements are down less than 1% from 2023. September fed cattle marketings were higher, coming in at 2% above last year.
Last week’s report was also a quarterly one, which included a steer / heifer breakdown. In the absence of a July cattle inventory report, this has been one of the main indicators that economists have been watching for evidence of heifer retention. Heifers have accounted for more than 38% of total on-feed inventory since July of 2018. During expansionary periods, this share tends to be in the low-mid 30% range. The estimate for October 1, 2024, came in at 39.7%, which was actually up a tick from July (39.6%).
I wanted to also discuss the potential impact increased live cattle imports may be having on the share of heifers on feed in the US. Through the first eight months of 2024, a sharp increase has been seen in the number females coming into the US. In addition to tight domestic supplies and high prices, drought in Northern Mexico has also been a contributing factor. While there has also been an increase in the number of males entering the US, that has been much less significant. If I simply subtract the net increases for both steers and heifers thus far in 2024, the heifer percentage would decrease to 38.9%. In other words, if I hold feeder steer and heifer cattle imports steady from last year, the number of heifers on feed as a percent of total on-feed inventory would drop by about 0.8%.
I readily admit this is a crude calculation that assumes all these cattle were placed on feed, and all were all still on feed October 1st. But lighter cattle that did not go straight to feed were likely offset by similar cattle in late 2023 that may be on feed now. Plus, a lot of Mexican feeder cattle come into the US at light weights, which tends to mean longer feeding periods. Regardless, the primary point to this discussion is that while a proportionally large number of female feeders are entering the US in 2024, the impact on the share of heifers on feed in the US is likely less than 1%. This is something worth watching going forward but it does not change the fact there does not appear to be substantial heifer retention this fall.
