Agricultural News
Friday's Cattle on Feed Numbers Likely to Show 17th Month in a Row of Higher Numbers Than Year Ago
Thu, 20 Oct 2011 03:39:56 CDT
USDA will release its estimates of U.S. feedlot placements, marketings and inventories on Friday when it publishes its monthly Cattle On Feed report. DowJones' monthly pre-report survey of cattle analysts indicates that they expect September placements to be lower than last year, September marketings to be slightly higher than one year ago and October 1 inventories to be up a short 4% from October 1, 2010.
Should the average of the pre-report estimates be accurate, October 1 will mark the 17th straight month (dating back to May 1, 2010) in which feedlot inventories have been higher than one year earlier. The expected 3.9% increase would be the second smallest this year and would be substantially smaller than August's +7.2% and September's +5.3%.
And inventories must begin moving closer to year-ago levels for a very good reason: The supply of feeder cattle outside of feedlots is getting smaller due to early placements. Recall that May placements were nearly 11% lower than last year, leading some to believe that feedlot numbers would decline. But then along came June at +4.1% and July at a whopping +21.3% as weather conditions worsened in the southern plains. September placements were fractionally smaller than last year but many of the cattle that normally would have been placed this fall are already in lots suggesting that placements should indeed be lower and that inventories should be falling back to 2010 levels- and below.
But there are still a good number of cattle to work through as those large placements of light-weight cattle this summer will not reach market weights until late winter. Steve Meyer of Paragon Economics writes in the Daily Livestock Report for the CME that "Once they are gone, though, supplies will tighten quickly- and we don't see much chance for Friday's report to change that scenario at this point."
Click on the PDF file link below to see the charts that Steve and Len Steiner have prepared- and in addition, they have some thoughts on beef cow slaughter as it continues to impacted by the drought in the southern plains.
dlr 10-20-2011.pdf
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