USDA's August cattle on feed report was bearish. It said fewer cattle than expected were marketed during July and a lot more cattle than expected were placed on feed during the month. The total number of cattle on feed at the start of August (9.644 million head) was down 2.3% compared to August 2008. The on-feed number is 1.3 percentage points higher than the 3.6% decline that was the average of pre-release trade forecasts. August is the sixteenth consecutive month with the on-feed number below the year-earlier level. It is also the smallest on-feed number for any August since 2003.

USDA said July placements of cattle into large feed yards (over 1,000 head capacity) were 12.5% above July 2008. The average of pre-release trade forecasts was for July placements to be up 6.5%. Higher placements are due in part to more feeder cattle being available. Placements were down 13.8% in May and 8.4% in June.

The number of cattle placed on feed weighting less than 600 pounds was 26.4% higher than last year. Placements of feeders weighing 600-699 pounds were up 15.9% and placement of cattle weighing over 800 pounds was up 17.0%. There were 4.8% fewer feeder cattle weighing 700-799 pounds placed on feed than a year-ago. The calculated average weight of cattle placed on feed during July was 0.6% lighter than in July 2008.

Cattle feeding returns have been negative for each of the last 26 months. From June 2007 through July 2009, calculated losses for cattle feeding in the southern plains have averaged $100 per head according to the Livestock Marketing Information Center.

USDA said marketings of fed cattle from large feed yards during July totaled 1.928 million head, down 5.4% compared to July 2008. The trade forecast July marketings to be down 4.8%. Steer and heifer slaughter in July was down 5.2%. July 2008 had one more slaughter day than last year due to Independence Day falling on a Saturday this year.

The average retail price for choice beef during July was $4.179 per pound. That was down 9.8 cents from June and down 16.1 cents from July 2008.

U.S. beef exports during the first six months of 2009 were up 2.9%. Beef imports were up 12.0%.

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

                            2007      2008      2009   Percent of
                           ------- 1,000 head -------   Year Ago
On Feed July 1           10,737    10,295     9,752     94.7%
Placed during July        1,622     1,656     1,863    112.5%
Marketed during July      1,999     2,037     1,928     94.6%
Other Disappearance          61        45        43     95.6%
On Feed August 1         10,299     9,869     9,644     97.7%