Agricultural News
Economist Derrell Peel "Not Surprised" by Latest On Feed Report, Sees Steady-Higher Prices Coming
Fri, 22 Sep 2017 15:33:26 CDT
The United Stated Department of Agriculture, on Friday, released the latest report for Cattle on Feed, as of September 1, 2017. Radio Oklahoma Ag Network Farm Director Ron Hays reached out to Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel for his initial response to the numbers in this report. You can hear Peel offer his complete analysis of the report to Hays, by clicking or tapping the LISTEN BAR below at the bottom of the story.
"This report was pretty well anticipated- not a big surprise to me. I don't know how the trade will react," Peel remarked, summing up his reaction. "The placements came in a little bit higher than the average guess, but they weren't really outside the range."
Peel says cattle futures has seen a nice run-up lately, and believes the numbers in this report could set up the market for an excuse to apply some pullback.
According to Peel, this month's report measured cattle placements are up 102.6 percent over last year; marketings at 105.9 percent of last year; and a total cattle on feed right on target at 103.6 percent - a figure just slightly lower from last month's 104.3.
"This marketings number was good, it was bigger than placement on a percent increase basis, so it did pull the on feed total down," he said, while also crediting feedlots with managing to stay fairly current as they prepare to come off of the summer lows. "There's been some indication just in the last week or two that feedlots have been kind of bowing up a little bit to get past these summer lows - they may be holding these cattle a little longer. Carcass weights are certainly going up seasonally, but they are still below year-ago levels."
As long as the pipeline keeps from getting backed up, Peel says he believes he's seen the industry do a good job handling its aggressive marketing rate for several months now.
Looking at the balance of the year, though, Peel expects to see some seasonal improvement in fed cattle prices as we finish out the year. He says that is predicated on boxed beef doing the same thing. He also predicts the price of feeder cattle to drop, but argues it may not drop very much, given the strong demand for stocker cattle currently.
Click here to view the September Cattle on Feed Report, issued Friday afternoon by USDA.
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