January Cattle on Feed Report

January USDA’s Cattle on Feed Report

I’m KayDee Gilkey with today’s Open Range.

January USDA’s Cattle on Feed Report was released last week and sparked a strong rally in the both the live and feeder cattle futures markets. The latest inventory count for the nation's cattle feedlots has some surprising and also some possibly encouraging numbers.
USDA Livestock analyst Shayle Shagam says.
Shagam: “I think the report will be a little bit of a surprise for the trade. On average, most industry analysts were expecting feedlot placements to be up.”
Those feedlot placement numbers were down actually by 1 percent at 1.66 million head. He says perhaps producers have more forage in reserve than pundits predicted --in spite of the drought and the record high hay prices. Producers may not be wanting to diminish their herd numbers but rather retain. Another explanation Shagam gives is that some feedlots may be struggling.
Shagam: “Some of them simply may not be able to purchase the number of cattle that they wanted at the prices that the market is setting right now.”
The number of cattle on feed on January first was 11.2 million head which was about 6 percent below earlier. About 1.7 million head were placed in feedlots during December which was down about 1 percent from December 2011. And marketing of fed cattle during December was 1.75 million head, was about 2 percent below December 2011.