February 1, 2008

US cattle on feed edge higher on January

The number of cattle in US feedlots at the start of 2008 hit a record 12.1 million head, which observers say could guarantee high cattle supplies over the first half of this year.

On January 1, the cattle on feed figure was 1 percent higher on the same period in 2007, and steady against December 2007 results.

The increase was reflective of market expectations.

The slow rise of cattle on feed during December was partly blamed on lower feeder cattle prices and low cattle placements that year.

US feedlots had reportedly found it difficult to pass on higher feed grain prices and operation costs to processors.

The placement of cattle into the US feedlots on December, which was at 1.7 million head, dropped 20 percent against the 2.13 million head that entered feedlots on November.

Fed cattle marketed during December totalled 1.65 million head, up 1 percent on 2006, but down 4 percent on 2005 numbers.

Amidst high cattle turn-off and a slowing economy, the US live cattle futures market points to a further rise in fed cattle prices from the current US$0.91/lb to US$0.95/lb in April and US$95.3/lb by August.

The feeder cattle futures also indicate a 10-percent rise in prices through to May.