April 27, 2009
US cattle on feed down five percent on-year
Total US cattle on feed reached 11.15 million head as at April 1, 2009, down five percent on-year, the smallest April inventory since 2005, according to the latest USDA Cattle on Feed report.
Cattle placements during March increased four percent on-year to 1.8 million head, the fifth month to record a rise in cattle placements on year-ago levels since the beginning of 2008.
Cattle were placed at heavier weights, with those weighing 800 pounds or more increasing 12 percent, accounting for 32 percent of all cattle placed. Cattle weighing 600 pounds or less declined two percent during March, representing 17 percent of total placements.
The increase in cattle placements indicate a potential increase in fed cattle supplies during July and August, while the higher placement weights are likely to increase the number of cattle grading Choice, a bearish factor on already depressed wholesale choice beef prices.
Despite the increase in March cattle placements, the USDA expects placements of feeder cattle into feedlots to be lower during the second half of 2009. This is mainly due to the smaller US calf herd, along with possible incentives such as cattle price increases expected in late 2009 for producers to retain heifers for herd rebuilding.
