USDA's May cattle on feed report contained no big surprises and is probably a bit bearish. USDA revised upward their estimate of the number of cattle placed on feed during March by 6,000 head and reduced their March marketing estimate by 4,000 head. Thus, the revised April 1 cattle on feed inventory is 10,000 head higher than estimated last month.

The total number of cattle on feed at the start of May (10.822 million head) was down 2.8% compared to May 2008 and close to the 3.0% drop which was the average of pre-release trade forecasts. May is the thirteenth month in a row with the on-feed number below the year-earlier level. It is also the smallest on-feed number for any May since 2005. Cattle feeding returns have been awful with average closeouts showing losses for each of the last 23 months.

USDA said April placements of cattle into large feed yards (over 1,000 head capacity) were 4.2% above April 2008. The average of pre-release trade forecasts was for April placements to be up 6.3%. Placements were below the year-earlier level in 9 of the 12 months of 2008, but have been above year-earlier in three of the four months thus far this year.

USDA said marketings of fed cattle from large feed yards during April totaled 1.871 million head, down 6.9% compared to April 2008. The trade forecast April marketings to be down 5.8%. Steer and heifer slaughter in April was down 6.6%. April 2008 had the same number of slaughter days and last year. The low marketing and slaughter numbers are due to low on-feed numbers and reduced movement, creating some concern over backing up cattle in feed yards.

The number of cattle placed on feed weighting less than 600 pounds was 12.7% higher than last year. February 2008 was the last previous month with placements of feeder cattle weighing less than 600 pounds above the year before. The calculated average weight of cattle placed on feed during April was 0.8% lighter than in April 2008.

The average retail price for choice beef during April was $4.273 per pound. That was down 2.7 cents from March but up 10.1 cents from April 2008.

U.S. beef exports during the first three months of 2009 were up 6.6%. Beef imports were up 10.4%.

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

                            2007      2008      2009   Percent of
                           ------- 1,000 head -------   Year Ago
On Feed April 1          11,644    11,684    11,162     95.5%
Placed during March       1,568     1,536     1,600    104.2%
Marketed during March     1,816     2,010     1,871     93.1%
Other Disappearance          99        75        69     92.0%
On Feed May 1            11,297    11,135    10,822     97.2%