April placements of cattle on feed reached 1.70 million head, up 5.5% from a year earlier, the largest year-on-year increase since July 2024, according to USDA’s latest Cattle on Feed report. The result ended a streak of 10 consecutive months in which actual placements ran below model-implied estimates, with the cumulative shortfall during that period reaching nearly 832,000 head, per LEAP Market Analytics (LMA).
The shift reflects intensifying pressure from drought across much of the US. As of May 24th, 71% of all pasture and rangeland in the lower 48 states was rated “fair” or worse, with a composite condition index below 42%, well below the 51% recorded at the same point last year and a five-year average of nearly 50%. Beneficial rainfall reached drought-stricken areas last week, but LMA cautions that several months of dryness will not be quickly undone.
With ranchers less willing to hold surplus beef cattle on deteriorating pasture, feedlot head counts are under upside pressure. Total cattle on feed reached 11.58 million head as of May 1st, up 1.8% year on year. LMA projects Q2 placements at 1.9% above year-ago levels, followed by Q3 at +1.7%.
The picture is more strained at the packer level. Fed cattle marketings last month came in 10% below a year earlier, and LMA estimates packer losses exceeded $300 per head last week. Cash prices for fed steers reached an all-time high of nearly $263 per cwt (5-area weighted average, live FOB, all grades) two weeks ago before easing below $261 per cwt. With packers holding firm, marketings are expected to stay subdued for the next few months.
If current trends hold, LMA sees total cattle-on-feed inventories running 3–4% above year-ago levels by late summer or early fall. Drought-driven placement pressure alongside constrained packer demand points to a meaningful supply build in the second half of the year.
For the full placement model data, packer margin estimates, and seasonal outlook, read the complete LMA report on Vesper: https://app.vespertool.com/market-analysis/3033