April 24, 2008

US cattle on feed inventory surges as second highest in twelve years

US cattle on feed figures for March was the second highest cattle and calf inventory since records began in 1996, at 11.7 million head, the USDA said.

The 11.7 million head on feed was slightly above the figures last year for feedlots of 1,000 head or more.

The March inventory includes 7.35 million steers and steer calves, a drop of 1 percent on 2007.

Steers made up 63 percent of the total cattle on feed, while heifers and heifer calves made up 4.28 million head, up 3 percent on-year.

Placements, however, for March only reached 1.74 million head, 11 percent lower than 2007.

Marketings of fed cattle from the inventory reached 1.84 million head, also below the same period in 2007.

Most of the cattle in US feedlots during March would have been placed during the US autumn as drought pushes farmers to stop backgrounding and send the cattle straight to the feedlots.

However, the higher price of feed has been constraining these placements in recent months.

Beef from the cattle currently on feed will flow onto the market in the next two quarters of 2008, with the reduced placements in the first quarter of 2008 expected to tighten beef supplies towards the end of this year.