July 2, 2012

US cattle placements rise 15% in May

According to USDA, an expected increase in cattle placement during May, following limited placements in March and April, has boosted US cattle on feed inventory to an increased value of 2% on-year to 11.08 million head.

Cattle placement in US feedlots during May increased 15% on-year to 2.09 million head, with a significantly higher number of cattle within the heaviest (over 800 pounds) and the lighter categories (under 600 pounds).

With the dry conditions expected to continue, more feeder cattle are expected to be placed into US feedlot in June. Subsequent to the poor pasture conditions, the US cattle market in the longer term is expected to continue, facing an overall shortage of calves. Although beef cow slaughter has declined since the beginning of 2012, an anticipated higher beef cow slaughter, due to the expanding dry conditions, also suggest tight US cattle supply right through to 2014.

US cattle marketing during May increased 1% on-year to 2.02 million head, driven largely by 9% increase in the number of cattle marketed out of Nebraska.

Following the rise in cattle marketing in May, US cattle slaughter for this period increased 2% on-year, totalled 12% higher than April numbers to 2.84 million head (USDA Cattle Slaughter Report).

The increase in US cattle slaughter in May was attributed to higher slaughter of steers (up 4% on-year), heifers (up 1%) and dairy cow (up 14%), despite lower turn-off for beef cow (down 11%) and bulls (down 2%). US beef cow slaughter during January to May declined 7%, accounting for 10% of the total cattle slaughter during this period.

Despite the higher cattle slaughter in May compared to April, beef volumes in US cold storage as of May 31, 2012 declined 4% from the previous month to 226,343 tonnes.

According to the latest USDA Cold Storage Report, the US beef stock in May remained 12% above the volume registered in May 2011.