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Cattle On Feed

25 June 2008
Ron Plain
Ron Plain

US - USDA’s latest cattle on feed report had good news for the cattle industry. The total number of cattle on feed June 1 (10.814 million head) was down 4.1% compared to last year and 1.3% below the average of the pre-release trade forecasts. This is the smallest on-feed number since last September.

May placements of cattle into large feed yards (over 1,000 head capacity) were 12.0% lower than the year-ago number. The average trade forecast was for May placements to be down 9.6%. Placements were the lowest of any May since 1997. The number of cattle placed on feed in the first 5 months of 2008 was down 3.9% compared to January-May 2007. Spring placements were down 9.1% compared to March-May 2007.

More fed cattle were marketed than expected last month. The trade forecasted May marketings to be up 1.7%. USDA said marketings of fed cattle from large feed yards during May totaled 2.14 million head, up 2.6% compared to May 2007, despite one fewer slaughter day. Marketings during the first 5 months of 2008 are up 3.5% compared to the same months last year. The number of calves weighing less than 600 pounds placed on feed during May was down 19.1%. The calculated average weight of cattle placed on feed during May was 0.4% heavier than May 2007.

The futures market is predicting record fed cattle prices later this year. The December live cattle contract settled today at $113.525/cwt. That is $20 above the current cash market. The spread between nearby and deferred contracts is very large. The December live cattle contract closed $1.50/cwt above the October contract, which is $7.17 above August, which is $9.27 above today’s close for the June contract.

The average retail price for choice beef during May was $4.241 per pound. That was up 6.9 cents from April but down 5.6 cents from May 2007. Domestic beef demand in 2008 has been weak when compared to last year, especially for higher quality cuts. For example, the average retail price of ground beef in May 2008 was 0.6 cents per pound higher than a year earlier; but the price of choice boneless sirloin steak was 40.3 cents per pound lower this May. High gasoline prices and a slow growing economy are likely reasons for the weakness in meat demand. Fortunately for cattle prices, export demand for beef more than offsets the weak domestic demand.

Cattle On Feed, 1000+ Capacity Feedlots, U.S.
.
2006
2007
2008
Percentage of
.
------ 1,000 head -----
Year Ago
On Feed May 1 11,559 11,297 11,135 98.6%
Placed during May 1,903 2,159 1,899 88.0%
Marketed during May 2,160 2,085 2,140 102.6%
Other Disappearance 115 99 80 80.8%
On Feed June 1 11,187 11,272 10,814 95.9%

Further Reading

More information - You can view the Cattle on Feeed report by clicking here.

TheCattleSite News Desk



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