10/23/06 Record feedlot inventory

American Rancher October 23, 2006 The inventory of cattle in U.S. feedlots this month is nine percent more than this time last year at 11.4 million head. Shagum: "Which is actually the highest number of on feed cattle for October since the survey began in 1996." That's USDA livestock analyst Shayle Shagum. Large feedlot numbers even though placement numbers in October were down five percent from September a year ago. Marketings were also down at three percent less than a year ago. At any rate feedlots have lots of animals and Shagum says; Shagum: "It implies that obviously we are going to be heading into a period of lower cattle prices as these cattle do come out of feedlots. The question is when is that going to happen? A lot of these cattle were put in relatively early and as a result it will take awhile for them to put on the weight and reach the grading levels that will command the Choice grade premiums." Another interesting number from the USDA Cattle on Feed report is that about 36 percent of the cattle in feedlots are heifers. What does that mean? Shagum: "It does imply probably that there has been some tempering of producer expansion plans." Shagum sees Choice steer prices remaining in the 80-dollar range through the end of the quarter and running at about 87 dollars a hundredweight as we move into 2007. I'm Bob Hoff.