USDA Cattle on Feed Report - Aug. 1 Cattle on Feed Up 1%

OMAHA (DTN) -- Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.2 million head on Aug. 1, 2022. The inventory was 1% above Aug. 1, 2021. This is the second highest Aug. 1 inventory since the series began in 1996.

Placements in feedlots during July totaled 1.77 million head, 2% above 2021. Net placements were 1.71 million head. During July, placements of cattle and calves weighing less than 600 pounds were 410,000 head, 600-699 pounds were 280,000 head, 700-799 pounds were 400,000 head, 800-899 pounds were 405,000 head, 900-999 pounds were 195,000 head, and 1,000 pounds and greater were 75,000 head.

Marketings of fed cattle during July totaled 1.83 million head, 4% below 2021.

Other disappearance totaled 56,000 head during July, 2 percent above 2021.

DTN ANALYSIS

And just like we assumed, analysts missed the mark on Friday's Cattle on Feed Report. Friday's COF report really amounted to focusing on one thing and one thing only -- placement data. Analysts projected that placements would be 98.8% of a year ago with estimates ranging from 95.0% to 101.3%. But Friday's report shared that placements amounted to a whopping 1,765,000 head, 2% higher than a year ago.

The states that saw the biggest increase in placements were Oklahoma, up 26% from a year ago; South Dakota, up 24% from a year ago; Texas, up 7% from a year ago; and both Kansas and Nebraska placed 2% more cattle in July 2022 than compared to a year ago. The report shared that calves weighing under 600 pounds saw a 35,000 head increase from a year ago; feeders weighing 600 to 699 pounds grew by 25,000 head compared to a year ago; the 700 to 799, 800 to 899, and 900 to 999 pound divisions of feeders fell in placements compared to a year ago; and those weighing 1,000 pounds or more grew by a mere 5,000 head compared to last year's data.

The number of cattle on feed wasn't shocking as it came in at 11,224,000, which is 1% higher than a year ago. And analysts accurately predicted the report's marketing data as cattle sold for marketing in July totaled 1,825,000 head, which is 96% of a year ago. There were fewer cattle marketed in July as there was one less slaughter day in the month than compared to a year ago.

The biggest take away from Friday's report was that our assumption was correct, placements where higher than what analysts projected as drought conditions continue to push cattle into feedlots. Nevertheless, this report will likely weigh heavily on the market come Monday, but from a long-term perspective it won't derail the market's trajectory.

	USDA Actual	Average Estimate	Range
On Feed Aug. 1	101.0%	100.8%	100.1-101.1%
Placed in July	102.0%	98.8%	95.0-101.3%
Marketed in July	96.0%	96.9%	96.0-102.1%