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If you've been following my work for long, you know that I grumble from time to time about USDA's monthly Cattle on Feed report. It's beyond frustrating when traders often elect to make knee-jerk reactions based on how the report's final data differs from pre-report estimates rather than taking the time to absorb the information at hand and think about how it will affect the market at large. Friday's upcoming Nov. 1 Cattle on Feed report will likely deserve some attention, as there's a story -- a changing reality -- unfolding in the countryside and hiding behind the Cattle on Feed numbers that will affect the cattle market for years to come.

Pre-report estimates have pinned total on-feed numbers to be anywhere from 99.5% to 100.1% of a year ago. Last year, the Nov. 1 on-feed numbers totaled 11,931,000 head. Less than 10 years ago, the market was accustomed to seeing on-feed totals closer to 10 million head, or on the upper end of 11 million head. It wasn't until 2019 that the market saw on-feed totals reach 12 million head for the very first time, and the feeding game has forever been changed since.

The lurking, uncomfortable reality that cattlemen need to ask themselves is this: How can an industry with the fewest number of beef cows since 1951 be paired with near-record-breaking on-feed totals?

Cheap feed, improved feeding technology, genetics and, like it or not, COVID-19, have all played a role in changing the way cattle are finished over the past decade. It used to be presumed that the Cattle on Feed report reflected cattle that would be on feed for roughly 120 days, but recent feeding data shows that cattle are spending much longer on feed compared to years past. Dr. Derrell Peel of Oklahoma State University said: "Feedlot cattle achieved more total gain now than before due to increased days on feed. The average days on feed has increased significantly in recent years to a current average of 187 days, up by 39 days from 2010. This means that feedlots can now finish slightly less than two sets of steers per year, or in other words, feedlots can maintain feedlot capacity while producing less animals per year."

It's presumed that the January 2025 Cattle Inventory report could show even fewer beef cows compared to a year ago, given the industry's slaughter data. While we know the rapid onset of drought has pushed more cattle into feedlots because of feed limitations and that beef on dairy numbers are influencing on-feed totals, there are still no signs of heifer retention occurring yet, with heifers representing 40% of the total number of cattle on feed. As a cow-calf producer at heart, I'm led by the industry's data to ask myself -- and I ask you as well -- what will the cow herd build-back look like this time around?

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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