June 29, 2007

More cattle placed in DDGS feedlots in US Midwest

More US cattle are now placed in feedlots compared to a year ago at 11.2 million heads as of June 1., according to the USDA cattle report.

The May placement, which is 13.5 percent higher than May 2006, had to be seen against the 2006 drought which had reduced placements severely.

When compared against the five year average however, May placements were 2.5 percent lower. Cattle marketings during May were 3.5 percent lower than a year ago, at 2.1 million head.

Rising grain costs has caused feeder cattle to be brought in at higher weights: placements of cattle weighing above 363kg were up 21 percent in May compared to a year ago.

The report also noted more feedlot activity are now concentrated in the Midwest, where there is an abundance of distillers grains. States like Iowa, South Dakota and Nebraska saw increases of higher than 8 percent compared to June last year.

A larger supply of feeder cattle and calves outside feedlots is expected. Placements are likely to exceed year ago levels from July to September.

The calf crop in 2007 is expected to be the smallest since 1952 and would indicate a limited number of cattle being placed in feedlots during the last quarter.

Placements last year in the final quarter were the smallest on record. This year's placement is expected to be just slightly higher than last year's.

Due to the higher placements, beef supplies are expected to be expanded, compared to last year.