11/20/06 Feedlot inventory up; placements down

American Rancher November 20, 2006 There were 12 million head of cattle in large U.S. feedlots as of November 1st and USDA analyst Shayle Shagum says that's another record level. Shagum: "The USDA's Cattle on Feed Report showed the number of cattle on feed in U.S. feedlots with capacity of 1,000 head or more were up four percent on November 1st, which is a record for the month going back as far as the series has been in existence which is 1996. It also showed that we placed about 13% fewer cattle on feed in October and marketed about two percent more." Shagum explains the implications of the reduced placements. Shagum: "We are starting to run out of cattle outside of feedlots. We placed a large number of cattle earlier in the year just as forage conditions deteriorated and the number of cattle outside feedlots have been diminishing over time." That would tend to support cattle prices later on but the second implication is from the October marketings out of feedlots, just two percent above a year ago. Shagum: "It implies that there are probably more market ready animals which will be coming out of the feedlots in the next couple of months. In that respect it will probably put some pressure on fed cattle prices as these animals do come out of the feedlots." Shagum expects fed steer prices to hover in the mid 80-dollar a hundredweight range well into 2007. I'm Bob Hoff.