Talking Cattle on Feed and Feedlot Profitability on Today's Beef BuzzThu, 20 Jan 2011 5:53:22 CST
The January first Cattle on Feed Report will continue to show larger placements into feedlots compared to one year ago- at least that seems to be the concensus of several analysts we have heard from in advance of the Friday report.
One of those cattle market watchers is Rich Nelson of Allendale. He offers the following thoughts about this Friday's report. "December Placements are expected to be 2.8% larger than last year. This represents five months in a row of higher placements. The industry knows Placement levels will switch to below last year levels soon. The only argument is in which month that change happens. Availability of calves and feeders is a problem and it will get even worse. March corn futures averaged 566 1/4 in November and rose over 25 cents to 592 in December. Cattle placed in December will be marketed from May through September."
Allendale anticipates a Marketing total 2.9% larger than December of 2009. That comes after a 5.1% adjustment lower due to one less weekday and one more Saturday than last year. Weekly slaughters will remain larger than last year through spring then will move to even with 2010 by summer. After summer, slaughters will clearly be below previous year. Rich Nelson concludes that total Cattle on Feed as of January 1 will be 3.0% larger than last year.
Another opinion that tracks along with this sentiment comes from Jim Robb of the Livestock Market Information Center out of Denver. On today's Beef Buzz, we hear his thoughts on the Cattle on Feed report- as well as get details of a report that the LMIC has released on the profitability of the feedlot industry in calendar year 2010. Robb says that for 2010- feedlots made money much of the year- but that it got tougher as the year went along and that if you had not priced feed grains ahead for the end of the year- a strict cash in and cash out look at animals sold in December showed them in the red. For those that locked in their feed grain costs from earlier in the year- those losses turned into gains.
Robb sees profits for the first quarter of the year in the feedlot business- but adds it will be more difficult to see black ink after that.
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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