Ample moisture conditions in the Northern Plains and favorable calf prices have led to a good demand for replacement quality heifers. Prices for replacement heifers are rivaling their steer weight group counterparts in many cases. For example, last week in Montana both 700 pound steers and replacement quality heifers were bringing about $137 to $138 per hundredweight. Interest in retaining heifers in the Northern Plains was evident in the Jan. 1 USDA-NASS Cattle Inventory Report, with beef replacement heifers up over 19 percent in Montana, over 12 percent in North Dakota, and over 5 ½ percent in Idaho.

In the April Cattle on Feed Report, USDA-NASS indicated that about 36.4 percent of cattle on feed were heifers, which is the lowest number of heifers in several years. Buyer interest in replacement heifers further complicates the question of how many feeder cattle will be available for feedlot placements in the next few months.

The number of feeder cattle outside of feedlots on Jan. 1, 2011, was reported by USDA-NASS to be down about 3.33 percent from a year ago. Yet feedlot placements were up 4 percent in January, down slightly in February, and up 3 percent in March.

The increased placements so far in 2011 came from several sources. Cattle placed weighing less than 700 pounds were up over 6 percent, which was higher than many expected given the surge in feed prices. Extremely dry conditions in many parts of the Southern Plains forced calves to move from grazing into feedlots earlier than normal. The dry conditions extend down into Mexico as well. That, coupled with historically high prices, caused more feeder cattle imports from Mexico. For the week ended on April 23, a total of 464,535 Mexican feeder cattle had entered the US; 108,208 more than last year. Many of these feeder cattle likely went directly into U.S. feedlots rather than grazing programs due to the drought conditions.

Furthermore, calf slaughter is down about 15 percent from last year, which has resulted in increased placements of dairy calves on feed. Cattle on feed on April 1 in important dairy states included Washington up 23 percent from last year followed by California up 8 percent and Idaho up 7 percent.

It seems likely that at least some of the increased 2011 placements have been the result of placing lighter weight cattle early. So, feeder cattle supplies could be tight for the next few months with lower feedlot placements more in line with what was expected from the lower January 1 inventory.