September 28

9/28 – In Friday’s Cattle on Feed report, the USDA said feedlot inventories on Sept 1st were 11.4M head, up 3.8% from a year ago. New placements onto feedlots in Aug were up 9.1%. That follows an 11.0% increase in July. The jump in summer placements was partially a catch-up and rebalancing following processing plant closures in April/May. However, many of those July/Aug placements are due to herd liquidation as summer drought in OK/TX/KS decimated pasture conditions and raised feed costs for producers. Uncertainty regarding foodservice demand is also accelerating the trend toward cattle herd liquidation. Cattle futures that averaged $125.17/cwt in January, and plunged to $83.83 in April, have rebounded to $107.57/cwt. Cattle futures are averaging $109.49 for Q4 2020 and $112.48 for 2021, vs. a projected $106.39/cwt for 2020 and $115.48 in 2019.