USDA released the June Cattle on Feed Report last week. This monthly report estimates the number of cattle on feed in US feedlots with one-time capacity exceeding 1,000 head. Monthly cattle on feed reports account for more than 80% of total on-feed inventory in the US. For this reason, the markets tend to watch them pretty closely as they provide key insights into beef production levels over the next several months. In the previous report (May 2024), on-feed inventory finally dipped below year-ago levels. It seemed like this had been coming for a while but took longer than expected.

In the June report, May placements were the big surprise. After relatively friendly placement levels in March and April, May placements came in bearish. At 4.3% above last year, they came in higher than expected and even outside the range of pre-report estimates. Marketings came in right at last year’s levels – only a small fraction of a percent higher. With placements exceeding marketings, total on-feed inventory grew from May 1 to June 1. Total cattle on feed inventory was estimated to be just under the June 2023 level, coming in just shy of 11.6 million head.

This is somewhat surprising given the size of last year’s calf crop but is likely being impacted by cheaper feed leading to cattle being on feed a longer number of days. Harvest weights are also higher, which seems to support this narrative of slower marketings. The placement number is a little harder to explain and there did not seem to be a pattern with respect to weight. May 2024 placements exceeded May of 2023 in all weight categories

This June cattle on feed report sets the stage for next month. July will be very interesting as it will include a breakdown of the number of steers and heifers on feed. Since there will be no July cattle inventory report this year, this will be especially important. There have not been early signs of expansion as of yet, so examining the steer heifer mix next month will be very interesting.