US cattle on feed continues decline

US cattle on feed in feedlots as of January 1, 2009, fell 7 percent on-year to 11.23 million head, according to the USDA.

Cattle placements in December also fell 3 percent on-year to 1.65 million, lower than analysts' pre-report estimates. However, cattle marketings exceeded expectations, rising 2 percent on-year to 1.68 million head in December.

Some reports indicated that the US cattle on feed population has already peaked and will slowly decline heading into 2009. Reports also said forward contracting activity for fed cattle are falling behind year-ago levels due to poor margins. This factor, combined with uncertain business conditions in the coming months, indicates to a continuation of feedlots limiting numbers on feed.