There were about 12 million head of cattle in large U.S. feedlots being fattened for slaughter on Dec. 1, but those numbers were the result of early placements as producers took advantage of high cattle prices. They’re also the result of feedlots feeding longer to keep facilities full and packers wanting higher weights to produce more beef.

The inventory was up 2.7% year over year, and marketings of fed cattle at 1.75 million were down 7.4% year over year. Placements into feedlots in November at almost 1.87 million were down 1.9% from a year earlier.

The report had placements a little bigger than trade expectations. But nothing in the report was a big surprise, and there wasn’t anything that would cause any disruptions in the market, he said.

Good prices

Placements were down year over year in November but followed higher placements in October and September. Part of those higher placements was due to lack of resources and forage due to drought. The other part was good cattle prices.

“Prices are still well above a year ago across the board,” he said.

Producers told him they wanted to take advantage of the opportunity to recoup. Drought has moved around but has been in the picture for at least 2-1/2 years. The latest U.S. Drought monitor map shows it’s now worse in the Gulf states.

In addition to drought, “input costs in general have remained relatively high through this time period,” he said.

Tight supply

But the earlier big placement numbers don’t mean there’s more cattle; they’re just being placed earlier rather than later. The overall number of cattle continues to decline, he said.

“We’re going to see a lot tighter supply in 2024,” he said.

Marketings in November were down 7.4%, which could mean feedlots aren’t selling them in a timely manner. But in this case, feedlots are deliberately feeding them longer, he said.

“I think it’s intentional that we’re feeding them longer and feeding to bigger weights,” he said.

Beef production

There are fewer cattle as the supply gets tighter. Beef production in 2023 is going to be down5.2% in 2023, and it will fall even further in 2024, he said.

“There’s incentive on both sides to get carcasses bigger,” he said.

It’s a way for the packer to get more beef, and packers are offering fewer or no discounts for larger carcasses right now. Feeders want to keep the feedlot full. They’re in the business of feeding, and they’ll have to replace animals in the feedlot with higher priced feeder cattle to maintain volume of production, he said.

“As we go forward, feedlot inventories will continue to decline,” he said.

And as the industry retains heifers to rebuild, the feedlot inventory will drop more sharply. The October heifers on feed number was record high and the largest percent of the feedlot inventory since 2001, he said.

Herd rebuilding

Whether herd rebuilding will start in 2024 depends on whether drought persists and what the weather will hold. In general, producers seem hesitant to hold back heifers and there aren’t many heifers in the pipeline, he said.

A heifer calf held back in the fall of 2024, would be ready to breed in 2025, calve in 2026 and that calf would come out of the feedlot for beef production in late 2026 or early 2027, he said.

Holding back heifers to invest in the future would temporarily make tight feedlot supplies even tighter, he said.