Impact of COVID-19 on Agriculture

Cattle on Feed Report: Higher Inventory, Lower Placements

News / Newsline November 24, 2020

Credit: AFBF 

The latest Cattle on Feed Report shows a decline in placements and an increase in inventory. Micheal Clements shares how the data from the Department of Agriculture impacts livestock markets.

Clements: The November Cattle on Feed report shows the number of animals on feed as of November 1 is higher than it was this time last year. The report provides monthly estimates of the number of cattle being fed for slaughter. Scott Bennett, American Farm Bureau Federation Congressional Relations Director, says the number of cattle on feed has largely followed seasonal patterns, but since August has been running above recent years’ levels. 

Bennett: Most significantly, the report showed a total inventory of 11.97 million head on feed in the United States. With large monthly carryovers to offset a drop in placements, this is the highest November inventory since the series began in 1996.

Clements: Bennett says placements, described as new animals being placed on feed, were lower than expected.

Bennett: Placements were 11 percent under those from a year ago and more significant than the 8.9 percent decrease estimated by analysts. While the placements in October of 2019 were record high, we’ve been running ahead of year ago placements since April and May during the height of the pandemic.

Clements: Bennett says the near-term future will be dictated by how COVID-19 impacts the supply chain.

Bennett: This report would be considered neutral to bullish. Looking into the future, the big question mark is how much a resurgence of COVID-19 effects packing capacity. While we do not anticipate it to be as challenging as it was this spring, the risks of plant closures still lingers in the air.

Clements: Find a complete analysis on the Market Intel page at fb.org. Micheal Clements, Washington.

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