ECONOMIC INFORMATION
FOR   INDIANA   FARMERS
No. 22
Division of Agricultural Economics October, 1943
THE CATTLE FEEDING SITUATION
Large feed supplies and price advances for cattle during the last five years have
resulted in an all time record number of cattle in the U. S. but the influences of
price ceilings on beef products are keeping cattle out of corn belt feed lots.
Increasing feed and labor costs have forced cattle feeding enterprises into a
position where wider margins are necessary for profit. Unless price ceilings on
dressed beef are raised, which seems unlikely, feeder cattle must be bought at
lower prices than those prevailing in mid-September.
Prospective increases in marketings of western range cattle during the late
fall will, doubtless, be accompanied by some decline in prices of the "good" to
"choice" grades of feeders. A decline of $1.50 to $2.00 from mid-September levels
is necessary to compensate for an average 33% advance in feed costs as compared
to a year earlier.
Cattle feeders will find it advisable to average down the grade of slaughter
cattle marketed in 1944. This may be done either by buying a plainer grade of
feeder cattle or by reducing the finish put on good quality feeders. Final decisions
must depend on the adjustments that will be made in the cost of feeder cattle
during the next three months.
The demand for beef has never been greater in the U. S. but much of this has
been rendered ineffective by the rationing system in use. There will continue to
be a rather urgent need for every pound of beef that can be produced. Unless
corn belt feeders find it possible to purchase feeding cattle with a reasonable
assurance of profit from feed lot operations, the nation will not only be deprived
of the tonnage that normally would be produced in the feed lot, but will have a
very bad seasonal distribution of the reduced tonnage.
Beef Cattle Numbers High; percent under 1942 figures which in turn
Few in Feed Lot were 19 percent below the record figures of
rt., . 1941.  More than three-fourths of the cattle
The beef cattle situation during 1943 has 
on feed on August 1 were intended for mar-
been characterized by the seemingly incon
gruous conditions of exceeding y high cattle considered in H ht of the low summer
numbers in the country, but relatively small 
inmovement of feeder   cattle,   foretells a
market receipts.  Favorable feed conditions beef durf     com,
coupled with generally rising prices   since .   for afc leagt  firgt ha,f of
1938 have resulted in an all time record in , 
cattle numbers in the United States. At the
beginning of 1943, all cattle on farms were Price Margins Unsatisfactory
, estimated   at   approximately   78.2   million Under "hold the price line" orders issued
yj^ead compared with 75.2 million a year ear- through the Office of Price Administration,
Her and 65.2 million in January, 1938. Un- price ceilings on dressed beef have been in
less cattle slaughter is unusually heavy dur- effect since May,  1942.   Although revised
ing the remaining months of 1943, further several  times,   these   ceilings  have  never
increases in cattle numbers are in prospect worked to the satisfaction of the industry,
for January 1, 1944. Live values crowded  and  exceeded levels
The number of cattle in Corn Belt feed consistent  with  ceiling  prices  on  dressed
lots is not consistent with the expansion in products.  The "roll back" and subsequent
cattle numbers. August 1 estimates of cattle subsidy to packers of $1.30 per cwt. begin-
on feed in 1943 show a reduction of eleven ning in June, 1943, put the packing industry