Feedlot Placements Less than Expected

Feedlots placed 1.6 million head into the lots in July according to a USDA report, a three percent bump over the same time last year.

Still, that increase is less than was expected and Livestock Analyst Shayle Shagam said there could some clear reasons why.

“We have seen some lower returns for feedlot operators. While still positive, those returns have been weakening with the declines in fed cattle prices and the fact that feeder cattle prices have been strong driven largely by demand over the past couple of months.”

There were thoughts that the Northern Plains drought might drive more cattle into feedlots and off grazing pastures.

Feeder calves are also more expensive than they were at this time last year by about $3 per hundredweight and that also plays into it according to Shagam.

“There may be some concern on the part of feedlot operators of overpaying for calves.”

There are also indicators that feed cattle prices might be going down which could be scaring off feedlots.