The feeder cattle market has been on a run since late 2023. For perspective, I am writing this on March 1^st and the March CME© feeder cattle futures contract has increased in value by more than $25 per cwt since the first of the year. As has been the case a few times since last fall, the most recent cattle on feed report did cause the market to stumble a bit. But by the end of last week, a good portion of that had been recovered.

Total on feed inventory has been running above year ago levels since fall of 2023. This has occurred despite the fact that feeder cattle inventory is considerably lower after several years of decreasing beef cow numbers. The surprisingly high cattle on feed levels have largely been the result of high placement levels in September and October due to dry weather in some parts of the US and high levels of live cattle imports. In addition to high placements levels last fall, increasing harvest weights in late 2023 also pointed to longer cattle feeding times.

In the most recent cattle on feed report from February, January placements once again came in higher than expected and the market did seem to respond negatively early last week. But as is often the case, some perspective is probably valuable. This was the third straight cattle on feed report that had placements below year ago levels and the January 2024 placement number was 7% below January of 2023. The pace of placements may be exceeding what many expected, but I think it is clear that the tide has turned.

While placement levels were well below last year, marketings were nearly the same in January. With marketings exceeding placements, total on feed numbers have been decreasing since December and are actually very close to year-ago levels now. Cattle on feed numbers tend to decrease seasonally through spring and summer. That decrease is likely to be ever greater in 2024 as tighter feeder cattle supplies reach feedlots.