Improving Forecasts of Cattle on Feed Placements

USDA Cattle on Feed (COF) reports are closely monitored by market participants as they provide important signals regarding future cattle supplies and market conditions. Among the major report components, cattle placements are especially difficult to anticipate. This study evaluates whether detailed feeder cattle marketing information can improve forecasts of cattle placements by distinguishing among auction markets, direct sales, and video auctions and by accounting for the timing of cattle delivery through forward contracts. The results indicate that although aggregate feeder cattle receipts explain much of the variation in placements, accounting for delivery timing improves model performance by better aligning observed transactions with actual feedlot placements. Forward-delivery transactions provide valuable information, although part of their explanatory power overlaps with recurring seasonal placement patterns. Feeder cattle imports from Mexico, existing feedlot inventories, and seasonal production cycles were also found to contribute significantly to placement activity. Cattle marketings are modeled for completeness and are closely linked to federally inspected slaughter activity.