Cattle on Feed…

USDA released its August Cattle on Feed report last Friday, providing an update with respect to the current on feed inventory along with estimated placements on feed during July, which will influence fed cattle marketings later this year and in early 2019.The August 1 on feed inventory was 11.1 million head, 4.6% larger than a year earlier and 9.1% larger than on August 1, 2016.USDA's inventory estimate was actually very close to pre-release estimates, which averaged 4.4% above last year's inventory.USDA's estimate of placements of cattle on feed during July, at 8% above a year earlier, was somewhat larger than the trade expected as pre-release estimates averaged 5.5% above the August 1, 2017 inventory.Fed cattle marketings during July were 5% larger than during July 2017 and over 9% larger than in July 2016 according to USDA and were in line with pre-release expectations. farmdoc dailyAugust 27, 2018 values this fall is their reliance on export channels to move product.Ongoing trade disputes could disrupt not only higher valued meat exports, but also by-product movement.Recent fed cattle prices have been well below breakeven levels for most cattle feeders resulting in significant feeding losses.Iowa State's estimated feeding returns for yearling programs have produced losses for the last four months and estimated returns to calf-based feeding programs produced losses in both June and July.Cattle feeders appear to be headed towards yet another month of losses when costs and returns are summarized at the end of August.Losses among cattle feeders this summer and early fall could dampen demand for replacement cattle this fall.Eastern Corn Belt feeder cattle and calf prices were supported this summer by weaker feed grain prices and expectations that feeding costs of gain will continue to decline.Prices for 500-600 pound steers in Kentucky averaged $155 per cwt.during July-August, up modestly compared to last year's average of about $153 during the same time period.Last fall, Kentucky steer calves averaged about $151 per cwt.This fall, prices are likely to fall slightly below that level, averaging in the upper $140s as losses in the feedlot sector weakens demand for calves.