The USDA’s January Cattle Inventory report showed expansion phase of the Cattle Inventory is developing and is expected to accelerate in coming years. This expanding Cattle Inventory will impact several areas:
- The available pool of Stocker and Feeder Cattle Outside Feedlots is expanded. Our analysis shows on January 1, 2016 is up +5.3% year over
- The Calf Crop for 2016 is highly correlated with the beginning of year Cow Herd and Replacement Heifers. Our analysis expects the 2016 Calf Crop will expand to 35,200,000 head, an expansion of 2.6% y/y.
Expanding numbers of Stocker and Feeder Cattle are Outside Feedlots on January 1, 2016, this should be reflected in lower Feeder Cattle prices during 2016:
Based upon the January 1st U.S. cattle inventory statistics, we calculated the numbers of Calves Under 500#, Stockers and Feeder cattle Over 500# available to be Placed into feedlot programs in coming quarters. The numbers of Cattle in Feedlots on January 1st was reported at 13,177,000 head, 1.2% above a year earlier. Whereas, the total inventory of Stockers and Feeder animals in the herd was reported at 39,090,000 head, showing an expansion of +3.9% of a year earlier. As a result the Stocker and Feeder cattle outside feedlots on January 1st was 25,913,000 head, expanding by +5.3% above a year earlier. The smallest pool of stockers and feeder cattle outside feedlots over the last 10 years occurred at the beginning of 2015. This suggests that Feedlots will have a greater supply of Stocker and Feeder
Cattle available to go into feedlot programs during 2016.
The US calf crop is expected to expand sharply in 2016 and 2017 as the Expansion Phase of the Cattle Cycle builds: Our analysis forecasts the U.S. Calf Crop for 2016 to be 35,200,000 head, an annual increase of +2.6%.