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Fed Cattle Supply Fundamentals Supportive

03 July 2008
Ohio State University

US - U.S. feedlots moved a lot of cattle through the system in April and May setting up tighter fed cattle supply fundamentals for the second half of the year.

According to, Derrell S. Peel, OSU Extension Livestock Marketing Specialist, the latest USDA Cattle on Feed report indicated that fed cattle marketings in May were up nearly three percent from last year. There was one less business day in May this year so the increase on a daily average basis is about 7.5 percent above last year.

Moreover, placements of feeder cattle in May were sharply lower, down 12 percent from last year. This reflects, among other things, the anticipated lack of wheat graze-out cattle in the southern Plains. With larger than expected marketings and smaller than expected placements, the June 1 on-feed inventory was lower than expected at 10.8 million head, down 4 percent from one year ago. Fewer cattle on feed, combined with carcass weights lower than past year, is pulling down total beef production.

Federally inspected beef production was down 2.6 percent in the first three weeks of June compared to the same period in 2007. This will offset increased beef in April and May to moderate second quarter total beef production. Beef production is expected to be close to last year's levels in the third quarter and decrease 1 to 2 percent in the fourth quarter of the year. These supply fundamental should help support boxed beef and fed cattle prices in the second half of the year but just how much depends on demand factors including the levels of pork and poultry production, general macroeconomic conditions and international market factors.

TheCattleSite News Desk


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