June 25, 2010
US feedlot cattle surge in May
Cattle placed into US feedlots rose for the third consecutive month, up 23%, to 2.022 million head during May, according to the USDA.
The extent of the increase is in line with US analysts' expectations, with a number of factors supporting the surge in placements.
Improved pasture conditions earlier in the year meant US producers kept feeder cattle on grass for longer, feedlots have been anxious to start rebuilding feedlot inventories following lower placements earlier in the year and currently lower feed costs.
Larger placements over the past three months have not impacted US fed cattle prices, with the Choice beef cutout indicator currently 9% above year ago values. While Steiner Consulting Group is forecasting the Choice beef cutout indicator to ease from current levels heading into August (given the higher placements), the average forecast for August of 151US¢/lb is still 6% above year ago values and 4% above the five-year average.
US analysts are expecting placements to slow over coming months due to US summer grazing cattle not likely to be available till the US autumn months.
