An Agriculture Department survey reported record-high cattle inventory for the beginning of May, but feedlot placements are declining, which could mean the cattle cycle is in the early days of a contraction.

According to USDA’s May Cattle on Feed report, U.S. cattle and calves on feed for slaughter as of May 1 was 12 million head, a 2% increase over the 2021 figure (which accounts for animals in feedlots with a capacity of more than 1,000 head). The figure represents the highest amount since the Cattle on Feed report began in 1996.

However, feedlot cattle that were marketed decreased by 2% when compared to April 2021. Shayle Shagam, a USDA livestock analyst, said the decrease in marketed cattle could be the result of one fewer slaughter day in the month of April.

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“If you factor in marketings on a per day basis, marketings in April were actually about two percent above a year ago,” Shagam said in a USDA interview.

From a state standpoint, Texas led the country with 2.9 million cattle on feed at the beginning of May 2022. Nebraska and Kansas also contributed a substantial percentage, with 2.65 million and 2.48 million head of cattle, respectively.

In April 2022, placements in feedlots were 1% below the previous year. Shagam said this could reflect the future of the cattie market.

“Beef production is expected to fall in 2023,” he said.

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