April 22's Cattle on Feed (COF) report was bearish to most everyone's surprise. Seeing high on-feed numbers wasn't the jaw-dropping point, it was the placement division.
For those who missed it, cattle and calves on feed for March 2022 totaled 12.1 million head -- up 2% from a year ago; placements in feedlots totaled 1.99 million head -- steady with a year ago, and marketing of cattle in March totaled 2 million head -- down 2% from a year ago.
After an unprecedented two years of aggressive beef cow slaughter and drought-related marketing decisions that have placed cattle in feedlots earlier than normal, how can placements yet again be higher?
What doesn't add up with Friday's data is this simple question: Where are these cattle coming from?
From the state-by-state breakdown, we see Nebraska had a 7% increase in placements, California up 10%, and Washington had the biggest of them all -- a 68% increase. Still, feedlots are already bursting at their seams as there's been nowhere else to put cattle. Wheat pasture conditions this fall/winter were lousy and limited grazing conditions this past summer pushed ranchers to wean early and cull aggressively. Adding to the frustrating nature of the COF report is that it's a recap of what happened in the past month (so essentially, it's old news) but yet it affects current-day markets.
What's important to remember is that Cattle on Feed reports continue to come out monthly and sometimes hit the nail on the head and pass the market by without any notice, but at other times seem to miss the mark completely.
Just as a handyman doesn't use every tool in his toolbox every day, as cattlemen, we must do the same in how we use and view the COF reports -- take the data, draw any conclusions that may be presented and then move on. What happened a month ago happened, but now we must stay focused on the present and ensure that we're making the soundest decisions possible for the future.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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