The nation started 2008 with more cattle in large feed yards than any year since USDA began the current data series in 1995. The total number of cattle on feed on January first (12.097 million head) is up 1.0% compared to last year, slightly less than the trade forecast of up 1.1%. Although the U.S. calf crop has been steadily declining in recent years, this is the fifth consecutive year that has begun with an increase in the number of cattle in large feed yards (over 1,000 head capacity). The primary reasons for growth are that these large feed lots are gaining market share relative to smaller lots, and an increase in the number of imported cattle on feed.

USDA said December placements of cattle into large feed yards (over 1,000 head capacity) were 0.8% lower than the year-ago number, below the average of the pre-release trade forecasts of up 2.6%. The number of cattle placed on feed in 2007 was down 0.8% compared to January-December 2006.

More fed cattle were marketed than expected during December. USDA said marketings of fed cattle from large feed yards during December totaled 1.645 million head, up 1.2% compared to December 2006 and very close to combined steer and heifer slaughter in December which was up 1.3%. The trade forecasted marketings to be up only 0.3%.

The number of cattle weighing less than 600 pounds placed on feed during December was up 2.1% compared to a very small number placed last year. December was the third consecutive month with placements of light weight cattle above year-ago levels. Given high corn prices, this likely reflects a shortage of winter pasture. The calculated average weight of cattle placed on feed during December was 0.5% lighter than December 2006.

The average retail price for choice beef during December was $4.113 per pound. That was down 4.6 cents from November but up 9.2 cents from December 2006. Domestic beef demand in 2007 was up a bit less than 1% compared to 2006. The futures market is currently predicting that fed cattle prices will stay in the $90s throughout 2008.

Steers on feed were up 1.0% on January 1 and heifers were up 1.8%. The relatively larger increase in heifers on feed implies a decline in the cow herd.

        Cattle On Feed, 1000+ Capacity Feedlots, U.S.

                            2005      2006      2007   Percent of
                            ---- - 1,000 head  ----- 	 Year Ago
On Feed December 1         11,726    11,973    12,099     101.1%
Placed during December      1,884     1,714     1,701      99.2%
Marketed during December    1,715     1,625     1,645     101.2%
Other Disappearance            91        88        58      65.9%
On Feed January 1          11,804    11,974     12,097    101.0%