by David Anderson, Texas A&M University

Against a backdrop of record-high fed-cattle and calf prices in the cash and futures markets, USDA released its January Cattle on Feed report on Friday, Jan. 24 (see “News & Notes”). The report was anticipated for its potential evidence on a variety of questions, including reduced placements reflecting fewer cattle, slower marketings, reduced placements due to import restrictions of Mexican cattle, and the quarterly estimate of heifers on feed.

The report had something on all those questions. Starting with the headline numbers, feedlot marketings were up 1%. But, given there was one more “slaughter day,” or workday, in the month, daily marketings were slower than December of last year. That should help keep weights higher by keeping days on feed longer.

Of those cattle on feed, 38.7% were heifers. Heifers on feed were down 3.4%, or 160,000 head, from last January.

Placements were down 3.3%, a little less than pre-report expectations. Texas placed 22.7% fewer cattle, while Nebraska and Kansas placements were 5.7% and 3.8% larger than a year ago, respectively. The decline in placements came from lighter-weight feeders. Fewer weighing less than 800 pounds (lb.) were placed on feed, while more heavier feeders were placed. On the ends of the range, placements weighing less than 600 lb. were down 9.2%, but placements of those weighing more than 1,000 lb. were up 5.9%. Of any month, December typically has the fewest placements of feeders weighing more than 700 lb. Placements of cattle weighing less than 600 lb. in Texas were down almost 27% compared to a year ago. The large decline in lightweight placements might be a little evidence of the effect of restrictions on Mexican cattle imports.

The combination of marketings and placements led to almost 1% fewer cattle on feed than last year. Of those cattle on feed, 38.7% were heifers. Heifers on feed were down 3.4%, or 160,000 head, from last January. The 4.575 million heifers on feed represented a 25,000-head reduction from October. That decline in heifers on feed is not enough to indicate much heifer retention for herd rebuilding; however, it is a small move in that direction.

Overall, the report indicated a little more movement in the expected direction of fewer cattle on feed and fewer heifers on feed. We should expect the number of cattle in feedlots to contract even more later in 2025. Contracting numbers will affect weights, live and beef prices, imports and margins throughout the industry in later months.

The markets

Even with some snow and real winter weather in Texas, local markets trended higher for steers and heifers. Around the country heavier feeders tended to increase in price, while prices of some lighter stocker/feeder cattle declined a bit, likely pressured by rising corn prices. The Choice cutout pulled back in value a bit for the week further cutting the Choice-Select spread. The spread typically declines this time of the year.

Editor’s note: David Anderson is a professor and extension specialist, livestock and food product marketing in the Department of Agricultural Economics at Texas A&M University. This article is reprinted with permission from the Livestock Marketing Information Center website, www.lmic.info.

Angus Beef Bulletin EXTRA, Vol. 17, No. 2-A