Cattle On Feed

Ron Plain
University of Missouri
June 10, 2015

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The May cattle on feed report is bullish. April placements were well below pre-release trade forecasts making this report bullish for deferred futures.

USDA said the number of cattle on feed in large feedlots at the start of May was up 0.8% compared to May 2014. The pre-release trade forecast was for the on-feed number to be up 1.7%. This is the sixth month in the last seven with more cattle on feed than a year earlier.

April placements of cattle into large feed yards (over 1,000 head capacity) were 4.6% lower than in April 2014. The 1.548 million head placed was the fewest for any April since 2012. The average of pre-release trade forecasts was for April placements to be up 2.4%.

The Livestock Marketing Information Center put the average returns for fed steers marketed in April at a negative $218 per head. April was the fifth month in a row with red ink.

USDA said marketings of fed cattle from large feed yards during April totaled 1.639 million head, down 7.8% compared to April 2014, and the lowest April since before USDA started this data series in 1996. The trade predicted April marketings would be down 7.6%. Federally inspected steer and heifer slaughter was down 8.7% in April.

The calculated average weight of cattle placed on feed during April was up 1.5% from April 2014. The number of cattle placed on feed weighing less than 600 pounds was down 15.8% from the previous April. Placements of feeders weighing 600 to 700 pounds were down 4.0%; placements weighing 700 to 800 pounds were down 11.5%, but placements weighing more than 800 pounds were up 6.7% compared to a year earlier. The big placement of heavy weight cattle compared to the lighter weight categories implies placements were driven more by backgrounders pushing cattle onto feed than by feedlots pulling.

Choice beef prices at retail averaged a record $6.402 per pound during April. That was up 9.3 cents from March, up 53.1 from a year ago, and up 6.9 cents from the old record set in January.

Cattle on Feed, 1000+ Capacity Feedlots, U.S.
2013 2014 2015 Percent of
Year Ago
1,000 head
On Feed April 1 10,881 10,792 10,797 100%
Placed during April 1,738 1,623 1,548 95.4%
Marketed during April 1,815 1,778 1,639 92.2%
Other Disappearance 69 83 66 79.5%
On Feed May 1 10,735 10,554 10,640 100.8%

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