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CME: Number of Cattle Placed into Feedlots During January Reduced

12 March 2019

US - Last Friday, USDA’s National Agricultural Statistics Service (NASS) released the 1 January monthly "Cattle on Feed" report. Compared to pre-report estimated by industry analysts, the news was neutral (see table below), reports Steiner Consulting Group, DLR Division, Inc.

The number of cattle placed into feedlots during January was reduced by harsh winter weather and very muddy conditions in both feedlots and where the calves and yearlings are. That situation was most evident in Iowa, Kansas, and Nebraska.

Two states - Texas and Colorado - that were generally bypassed by the weather/mud, reported an increase in animals placed on-feed. Texas posted a year-over-year rise of 5.0 percent and Colorado was up by 8.3 percent. Nationally, year-over-year head placed was down 6.5 percent (a drop of 109,000 head).

Fed cattle marketed during January were aligned with the inventory or animals in feedlots. That is, as shown in the following graphic, marketed as a percentage of the cattle on feed was similar to a year ago and the prior 5-year average (2013-2017). For the month, the number of cattle marketed was above 2018’s (increased by 2.8 percent).

As of 1 February, the inventory of cattle (US feedlots with a capacity of 1,000 head or more) was up a very modest 0.4 percent compared to a year ago (an increase of 48,000 head). That was a slight decline from the survey as of 1 January (see the graphic below).

Typically the on-feed count increases slightly from 1 January to 1 February. At 11.678 million cattle, the February inventory was down significantly from 2017’s (dropped by 8.3 percent or by 896,000 head).

Muddy conditions clearly dampened placements in recent months. That situation may have persisted in February, but there will eventually be a turn-around. If pasture conditions are pheromonal, there may not be a bubble in placements. However, drought may cause a surge in placements and a quick downturn in yearling cattle prices. Note that yearling cattle prices are already below 2018’s.

As shown below (Production and Price Summary), 600-to 700-pound steer prices in the USDA’s Agricultural Marketing Service (Market News) Oklahoma combined auctions report last week were $153.07 per cwt., which was down 5.9 percent from a year ago. That same report showed 800-to 900-pound steers last week averaged $134.15 per cwt., down 3.4 percent year-over- year.

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TheCattleSite News Desk

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