USDA reported 11.163 million head in feedlots in September, up 0.7% year over year, but the marketing rate fell to a record low of 14.1% and pushed carcass weights higher. Lower placements anticipate a decline in inventories.
The latest USDA cattle on feed report shows that the inventory of animals in US feedlots rose to 11.163 million head in September, up 0.7% from a year earlier. Monthly inventories have held above year-earlier levels for the last five months. However, cattle placements into feedlots fell 9.2% year over year in August, while marketings of finished cattle slipped 3.3%; the average of placements and marketings stands at record lows within the available data.
Throughout the current cattle cycle, calf production peaked in 2018 at 36.29 million head and declined for eight consecutive years. For 2026, calf production is estimated at 32.5 million head, 3.79 million fewer than at the cyclical peak. The declines in average placements and marketings are broadly consistent with that smaller calf crop.
Despite the smaller supply, feedlot inventories have remained relatively high. The average inventory peaked in September 2022 and fell to a recent low of 11.4 million head in April 2026, just 4.0% —480,000 head— lower. The key lies in the slow rate of marketings: the marketing rate —the percentage of the inventory marketed each month— was 16.0% in July 2023 and averaged that same level since 2018, but fell below 15.0% in October 2025. The twelve-month moving average stood at a record low of 14.1% in August 2026.
That low rate allowed the inventory to hold above the year-earlier level for five months. However, the sharp drop in placements in July and August likely means the inventory will soon fall below year-ago levels and remain there for the foreseeable future.
The lower marketing rate is achieved mainly by lengthening the cattle's days on feed, which drove a dramatic increase in carcass weights from 2023 onward. Steer carcass weights rose 23 pounds in 2024, 24 pounds in 2025 and 32 pounds so far in 2026. Between 1960 and 2022, the average annual increase had been just 4.0 pounds; the gain of roughly 75 pounds over the last three years is equivalent to that recorded during the previous 18 years.
The sharp rise in weight also triggered a marked decline in average yield grades. The share of carcasses graded Y4/Y5 averaged 29.2% over the last twelve months, more than double the level six years ago. In turn, the higher incidence of bovine congestive heart failure has become a major health problem in feedlots and is very likely linked to the extremely heavy weights of finished cattle.
Looking ahead, it will become increasingly difficult to hold inventories. Cattle availability for feeding is expected to shrink through 2027 because of the smaller calf crop, although the resumption of Mexican cattle imports could ease some of the pressure, at least regionally. The delay in culling beef cows over the last three years means more replacement heifers will be needed simply to stabilize the herd, on top of those an eventual rebuilding would require.
The marketing rate could stay low, but it is unlikely to keep falling at the pace seen over the last 18 months. In that scenario, lower placements will push feedlot inventories down in the coming months.
