By Josh Maples
This year has shown some pretty large shifts from normal for every sector of the cattle industry. The number of feeder and stocker cattle auction receipts are no exception. The USDA-AMS weekly estimates of feeder and stocker cattle sold at auction in 2020 reflect some of the dynamics and challenges faced by producers.
The disruptions during the spring are immediately evident. The number of auction receipts during March-April 2020 was 33 percent (or 661k head) lower than during the same months of 2019. Prices were very low during this period and there were gathering/travel restrictions in most places, and many producers responded by holding cattle longer. The expected rebound came during May-July when auction receipts were about 18 percent (or 306k head) higher than during those months in 2019. August 2020 was much stronger than August 2019, but this was driven in part by the low prices during August 2019 due to the meat packing plant fire in KS. That disruption likely led to a similar holding strategy for cattle that came to market in later months.
Fall of 2020 has also seen plenty of challenges. Drought issues and higher grain prices pressured feeder cattle markets lower during October and auction receipts dipped again as some producers with available feedstuffs attempted to wait out a stronger market. We may see some larger late runs since the market has rebounded. This may be especially true in the Southeast where producers may have generally had better pasture conditions compared to other regions.
Year-to-date, 2020 auction receipts are down 4.3 percent compared to 2019. Of course, this dataset alone does not tell the whole story – not all cattle are sold in auctions and some are sold multiple times. However, the year-over-year comparisons are interesting. Underpinning all of this is the expectation that the calf crop has declined slightly since the peak in 2018. USDA estimates the national calf crop has declined a little less than one percent each of the past two years. Lower placements into feedlots also lend credence to the thought of lower calf crop totals on an annual basis. Looking ahead, the January 2021 Cattle inventory report will be especially interesting given the dynamics of 2020 and the production expectations for 2021.
Source : osu.edu