The USDA's Cattle on Feed report released Friday showed that producers placed 1.5 million head in feedlots in April while feedlots moved out over 2 million head, which is 11% more than a last April.
"It is a sign, hopefully, that we are starting to get caught up on cattle that have been building up on feed," says USDA livestock analyst Shayle Shagam. "When we looked at the amount placed during April we were down 2% and that left us with an on feed number on May 1 of about 1% lower than a year ago."
Steer prices are averaging $92 a hundredweight but with all the cattle coming out of feedlots it could drop to $90 by year's end. However Shagam says because of reduced inventory we're likely to see some upward pressure on prices next year.
"Supplies of cattle available to enter the feedlot are going to be diminishing," Shagam says. "That's going to force feedlots to bid higher for some of these feeder cattle."