Cattle on feed reported a 1% drop, according to USDA
The number of cattle on feed around the country declined by 1%, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service report issued in late January.
The report on cattle and calves on feed for the processing market in the U.S. for feedlots with a capacity of 1,000 or more head totaled 11.8 million head on Jan. 1, 2025, which was 1% below totals on Jan. 1, 2024, when the head count was 11.93 million.
James Mitchell, an assistant professor and Extension livestock economist with the department of agricultural economics and agribusiness at the University of Arkansas, said the estimates were in line with pre-report expectations.
“Notably, this marks the largest year-over-year decline in cattle on feed inventories since May 2024,” Mitchell said. “In 2024, cattle on feed inventories fell below year-ago levels only three times.”
Cheaper feed encouraged feedlots to feed cattle longer to heavier weights, keeping cattle on feed inventories stubbornly high, he said.
The inventory included 7.25 million steers and steer calves, which was up 1% from the previous year. This group accounted for 61% of the total inventory, USDA reported.
Heifers and heifer calves accounted for 4.58 million head, down 3% from 2024.
“It could simply reflect fewer heifers and heifer calves compared to a year ago, rather than early signal of herd expansion,” Mitchell said. “I wouldn’t read too much into this single data point. The decline in Mexican cattle imports in December due to New World screwworm likely contributed to this trend.”
Placements in feedlots during December totaled 1.64 million head, 3% below 2023. Net placements were 1.58 million head, USDA noted. During December, placements of cattle and calves weighing less than 600 pounds were 395,000 head, 600 to 699 pounds were 380,000 head, 700 to 799 pounds were 375,000 heads, 800 to 899 pounds were 287,000 head, 900 to 999 pounds were 115,000 head, and 1,000 pounds and greater were 90,000 head.
The top three states for cattle on feed with inventories of 1,000 or more as of Jan. 1 included Texas, 2.78 million head; Nebraska, 2.58 million; and Kansas, 2.4 million.
Marketings of fed cattle during December totaled 1.75 million head, which was 1% above 2023, the report noted.
Upward trend in prices
Mitchell noted the USDA has been projecting steer prices to be $195 per hundredweight based on the agency’s simple average of months for the area of direct sales, although it may depend on the January Cattle Inventory Report that was due to be issued Jan. 31. He expects that report to confirm another year of contraction, and markets will react to the report.
“Seasonally, fed cattle prices tend to decline into May and June,” Mitchell said. “If we see any significant weakening in fed cattle markets beyond week-to-week variability, it tells me there is a beef demand problem.”
Mitchell said the reports of above $2 per pound for fat cattle in the Southern Plains did catch his eye. “Whether we hold above $2 will depend on many factors outlined above, but the biggest unknown is support for beef demand in 2025,” he said.
Cattle markets have remained strong because supplies are tight along with a cyclical decline that started in 2019, and prices remain supported by supply fundamentals, he said. An improved feed price outlook has also helped support the feeder cattle market from the demand side.
Mitchell said feedlot operators will continue to feel the pinch of tighter feeder cattle supplies, which are likely to be more pronounced this year.
“Internationally, the ongoing ban on Mexican cattle imports due to New World screwworm further limits supply,” he said. “Feedlot management will need to focus on throughput and capacity utilization. Cattle prices are high, and that’s great, but we need to be vigilant about managing price risk.”
The markets may also react to developments on tariffs being imposed by President Donald Trump and retaliatory tariffs from Mexico and Canada.
Dave Bergmeier can be reached at 620-226-1822 or [email protected].
