1) The document analyzes cattle feedlot placements by weight class in November 2012. It notes that while placements of cattle under 600 pounds were larger than 2011, the total number was actually smaller than the previous year. 2) Over time, there has been a trend of heavier cattle being placed in feedlots, driven by factors like improved genetics and cattle performance. Monthly placements have also become more consistent throughout the year. 3) Future cattle placement patterns will likely continue trends of heavier placements and more consistent seasonal distribution, influenced mainly by feed costs and cattle performance, rather than temporary weather conditions.

1. Vol. 10, No. 249 December 27, 2012
In Monday’s edition of Daily Livestock Report, we errone- U.S. CATTLE FEEDLOT PLACEMENTS
ously stated that November placements of cattle weighing less
than 600 pounds increased 34% and implied that the number was BY WEIGHT CLASS
relative to last year. There was a “34%” in our spreadsheet but it indi- LESS 600 600-699 700-799 800 PLUS
cated that those light-weight cattle comprised 34% of total placements. 3500
That number is indeed large relative to the historical percentage of total
November placements that weigh 600 pounds or less but it is actually 3000
smaller than the 37% of November 2011 placements that fell in the light-
est category of the USDA report. Both years, of course, are larger than 2500
d
a
normal due to poor pasture conditions. This year’s big driver is contin- e
H2000
ued dry conditions in the wheat pasture regions of Texas, Oklahoma and d
n
Kansas. The normal practice of placing spring calves on wheat pasture a
s1500
u
in November was precluded by poor moisture and wheat conditions and o
h
T
the calves had to go somewhere. With limited grass availability, feedlots 1000
were about the only alternative. But the 645,000 head of lights placed in
November is actually 14% FEWER than were placed last year. The 500
453,000 head of 800-pound and over cattle placed in November was
10% LARGER than last year. The straight economics still favor placing 0
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
cattle at HIGHER weights but Mother Nature is forcing some cattle into
lots much earlier than would be desired. We’ve said it many times: ments weights. The final factor in this growth in the number of
What the cattle industry WANTS to do and what Mother Nature ALLOWS heavy cattle is simply performance. Today’s calves grow faster
it to do are frequently two very different things! than ever before meaning that cattle of a consistent age will be
All of this discussion of placement weights got us to wondering heavier. The advancements in genetic selection for milk production
about the historical patterns and what they might tell us about the future. in beef cows and calf growth rates, the availability of expected prog-
Obviously, $7-plus corn and wide swaths of drought conditions in tradi- eny differences (EPDs — a measure of the genetic value of a par-
tional cattle country wreak some havoc with these relationships but we ent animal) and their use by professional cattlemen have all im-
would be loathe to believe that history should be ignored. Some takea- proved early-age performance and thus placement weights.
ways about the chart at right:  The variation in placements of cattle in the lightest weight category
 The long-term downtrend in total cattle numbers is obvious. Where has also declined — at least during “normal” weather conditions.
monthly placements once frequently exceeded 2.5 million and occa- Steadily rising low-number months and falling high-number months
sionally hit 3 million head, they have not exceeded 2.5 million in any were the rule through 2009. That pattern was, like the heavy-weight
month since October 2007. placement numbers, impacted by higher feed costs. But it was pret-
 Part of that reduction is simply smaller calf crops and thus fewer ty much destroyed by the 2011 drought in Texas and Oklahoma
cattle available. But another aspect is a seasonal smoothing of when thousands of calves were pushed to feedlots months before
placements with the high months getting smaller and the low they would normally have been placed. As noted earlier, some of
months getting larger. This can be seen most clearly in the years that is still going on as drought conditions continue.
prior to 2008. The jump in feed costs in 2008 stopped the uptrend So what does all of this mean for future placement patterns?
for a couple of years but we have seen the lows for monthly place- We think only one of the discussed factors — rainfall/pasture conditions
ments again increase over the past couple of years. Drought condi- — is transient. And we hope it becomes transient soon! All of the oth-
tions have been a contributor but it appears that the seasonality of ers — higher grain prices, operational economics of feedyards and pack-
the feeding complex has certainly been reduced. ers, smaller calf crops, improved cattle performance — are pretty much
 The number of cattle placed at heavier weights has grown over permanent. Yes, grain prices could drop from their current levels if the
weather is favorable in 2013. But feed costs will still be significantly
time. Where 800-pound-plus cattle averaged 487,000 head per
higher than in the pre-biofuels era and the cost advantages of weight
month and 24.5% of total placements from 1996 through 2008, they
gains on pasture, though smaller, will not completely disappear.
have averaged 548,000 head and 28.5% of total placements since
About the only factor that we see that could stop this trend
then. Higher feed costs have provided ample incentive to put more
would be consumers’ balking at larger and larger cuts, thus limiting fin-
lower-cost pounds on cattle before they get to the yards, Plenty of
ished weights and pressuring placement weights. This concern, of
feedlot capacity has allowed those cattle to stay on feed pretty
course, is nothing new and the fact is that few cuts are sold in the same
much however long the feeder wanted to keep them and, finally,
size they come from the animal. Processing and merchandising methods
heavier cattle are generally more profitable for both feedlots and
that yield properly-sized items even from big cattle have been used for
packers. All of those have created incentives for heavier end
many years and will continue to be refined.
weights and thus allowed for — or even driven — heavier place-
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