Agricultural News
Placement Gains Are Surprisingly Small in March
Mon, 26 Apr 2010 6:22:48 CDT
The latest Cattle on Feed Report is being called neutral by some- like Tom Leffler of Leffler Commodities, and rather friendly by others, like Dr. Derrell Peel of OSU. We look at the numbers released by USDA on Friday on today's Beef Buzz.
Click here for the full report, as released by USDA on Friday April 23, 2010.
Here's the full commentary released by Dr. Peel on Friday afternoon:
"There is no doubt that the latest USDA Cattle on Feed report will cause a market reaction. After four months of lower placements, year over year, the trade was expecting a large increase in feedlot placements in March. The recent run up in feeder cattle prices suggests that demand for feeder cattle has been strong and a couple of months of limited feedlot profitability (after many months of losses) provided the motive. However, there was a wide variation in regional placement patterns and the resulting average was not only lower than expected but lower than the lowest pre-report estimate. The industry was keyed in on large placements in Colorado, Kansas and Nebraska which were heavily offset by reduced placements in Texas and Oklahoma. The resulting level of 103 percent of 2009 March placements does not even cover the fact that there was an additional business day in March. In short, there was no increase in March placements this year.
"Marketings were close to pre-report estimates at 104 percent of last year, again only holding steady when adjusted for the additional March slaughter day this year. The April 1 on-feed total 10.769 million head, down four percent from one year ago. This is the lowest April 1 on-feed total since 2004.
"Feedlot placements have relatively little to do with current fed cattle markets (which are strong for other reasons) but lots to do with fed cattle markets in the future. Not only was the level of placements lower than expected but most of the increase was in light weight feeders that will finish in September and October. This should moderate some of the concerns about summer market pressure. Obviously we are still assessing beef demand recovery but it appears that supply fundamentals have a lot of momentum going forward. Having said that, there will likely be some relative increase in placements April and May with cattle coming off of grazeout wheat. If it has any impacts it will be in short term timing of marketings in the fourth quarter but it does not change the fact that total feeder supplies are and will remain very tight."
The Beef Buzz is a regular feature heard on radio stations around the state on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the listen bar below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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