US fed cattle supplies show decrease

The latest US cattle on feed figures indicate further declines in fed cattle supplies over coming months, with cattle placed into US feedlots during February falling 1% on-year, to 1.665 million head, according to the USDA.

The fall in placements was largely the result of adverse weather conditions in the US during February impacting the movement of feeder cattle into feedlots. Pre-report estimates had placements declining 2%.

Interestingly, the decline in placements has largely been in the US states of Texas (down 15%) and Kansas (down 4%), while placements increased in Iowa, Nebraska and South Dakota (up 11%, 18% and 21%, respectively). US analysts recognise that this is an important trend emerging due to northern states having greater access to corn by-product feed and higher moisture grain.

Cattle on feed numbers (as on March 1) also declined 3% on the same period last year, to 10.864 million head.

Along with lower fed cattle supplies, average steer carcase weights so far this year have also declined by 2%. This has pushed beef production volumes below year ago levels. As a result, the 5-market steer choice indicator so far this month has averaged 13% higher than the same time last year, at 92.5US¢/lb – the highest seen since September 2008.