US fed cattle supplies remain larger than a year ago

The January Cattle report noted year-over-year declines in all classes of cattle, with a significant reduction in the number of calves available on January 1 for feedlots, stockers, and backgrounders to purchase this year. This will lead to a sharp decline in the number of calves placed in feedlots as the year progresses, and declines in beef production will likely be more noticeable in late 2024, according to the most recent USDA Livestock, Dairy and Poultry Outlook report

Despite declines in the number of cattle on January 1st, a slower pace of fed cattle1 slaughter is accumulating market-ready supplies in feedlots.

The latest Cattle on Feed report, published by USDA, National Agricultural Statistics Service (NASS), showed a February 1 feedlot inventory of 11.797 million head, just slightly above 11.754 million head in the same month last year but down 1% from January. Feedlot net placements in January were almost 9% lower year over year at 1.711 million head.

Marketings in January were 1.844 million head, nearly on par with last year but reflecting an additional slaughter day. On February 1, the number of cattle on feed over 150 days was up 6% above year-ago levels. This increase of market-ready supplies of fed cattle is likely driven in part by feedlots attempting to maximise poundage per animal, along with packers reducing slaughter schedules to maximise operational efficiencies as their margins are under pressure from paying much higher prices for fed cattle. As those measures are keeping cattle in feedlots longer, fed cattle are being processed at heavier weights than a year ago, partially offsetting lower total slaughter this year. 

Overall, beef production this year is expected to be 2% below levels in 2023, which is a slower decline than from 2022 to 2023, as shown in the chart below.