A continued increase in feedlot placements is setting the scene for a large supply of beef later this year, says Jim Robb, director of the Livestock Marketing Information Center, as he discusses the USDA’s Cattle on Feed Report set to be released at 2 p.m. Central on Friday, April 22.
Robb anticipates placements increasing around 10 percent from this time last year because of larger calf crops and lower feed grain costs. He says marketings should be up about 7 percent over last year, which is slightly overstated because of an extra slaughter day last month. The adjusted marketings are predicted to be up roughly 2-3 percent. All in all, the on feed inventory is expected to be 1-2 percent higher than March 2015.
“The big picture story is that we really have placed a lot of cattle in these recent months that will come out of feedlots in the second half of 2016, so we really are setting up the stage where the second half of 2016 will have more cattle year-over-year than we’ve seen in recent years,” Robb says.
An increased supply of beef for the second half of 2016 could mean a smaller check for producers.
“Those will be some of our lowest cattle prices of the year,” Robb says. “We’re not looking for a disaster. Probably looking at prices maybe a little stronger than the futures have indicated, but still the supply cycle will be increasing as we bunch these cattle placements in recent months.”
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