Regional Feedlot Marketings
By : Matthew Diersen, Risk & Business Management Specialist, Ness School of Management & Economics, South Dakota State University
At a recent producer meeting, people were talking about mandatory livestock price reporting in the broader context of fed cattle marketing. South Dakota has enough fed cattle to be reported in cattle on feed statistics. The large feedlots (1,000+ head) in the state typically have a strong seasonal pattern in placements, peaking in October, with limited variability in marketings. However, as a smaller feedlot state not many direct price reports have much information specific to South Dakota. An exception are the various committed and delivered reports, which give a breakdown by region of origin for fed cattle transacted for harvest. The region Northern Plains / Eastern Mountain contains North Dakota, South Dakota, Montana and Wyoming. The monthly version of the report, LM_CT143, is available here: https://www.ams.usda.gov/mnreports/lm_ct143.txt
The focus here is mainly on the Northern Plains / Eastern Mountain region, both for specific insights and to provide a possible template to analyze other regions. In November of 2019 the volume of cattle delivered from this region totaled 79,650 head, down from the year earlier and down as a percent of total cattle delivered (from 5.0% to 4.3%). The region Western States had a volume of 106,302 head, down slightly, but with the same market share (5.7%) as a year earlier. The region Eastern Cornbelt had a volume of 52,795 head, up from a year ago and with an increased share (from 2.3% to 2.8%). The regions with specific listed states (TX/OK/NM; KS; NE; CO; and IA/MN/MO) had an 84.3% market share during November.
The longer history of the Northern Plains / Eastern Mountain region reveals a strong seasonal pattern and substantial variability in deliveries. Since September of 2009 the lowest monthly volume month was 48,361 head in March of 2013. The highest volume month was 104,750 head in October of 2018. Such high volume was originally cause to suspect a larger shift in cattle feeding into the region. However, the level did not hold and volume delivered from the region continues to be influenced by farmer-feeders that retain ownership when the incentives are right to do so. Looking ahead, the average across months suggests a typical volume low point would occur in April at around 60,000 head and a high point would occur in October at around 90,000 head. Thus, there is substantial variability from this region that could influence the overall market in a given month.
The prior versions of LM_CT143 are available in the AMS archive, but the monthly data are not readily available as a custom run. However, daily and weekly data can be accessed by region using a custom run. Delivered cattle measured this way are only those delivered by a direct sale to a reporting packer. Thus, sale barn transactions or sales to smaller packers would be not included. When analyzing other regions, be aware of changes in the region definition over time.