June 19, 2008

The number of fattened cattle on US feedlots is on a continuous slip and it may go on due to record-high feed costs.

Record high feed costs deter placing of cattle and encourage the swift selling of cattle already in feedlots. Fed-cattle supplies have been on the decline for months as corn prices exceed US$7 per bushel.

Analysts expect cattle placement in May to plunge to a record low, which would leave the June 1 on-feed supply down more than 3 percent.

Feedlot placements are expect to remain low through the summer but could increase in autumn when grazing cattle comes off pasture.

The number of cattle available for market for the next few months is expected to be sufficient to meet demand. Limited estimates for the number of cattle in feedlots 120 days or more ranged from 98-99.2 percent of a year earlier.

According to Bob Price, president of North America Risk Management Services, there seems to be plenty of fed cattle around but cash prices could be under pressure for the next few months as kills decline seasonally.