The number of cattle on feed in large U.S. feedlots tightened again in USDA’s latest report, but year-over-year decreases were not as deep as trade analysts had estimated.
Cattle on feed on Aug. 1, at 9.837 million head, were down nearly 2 percent. Analysts had estimated the decline at 2.5 percent.
July placements were also higher than trade had expected. At 1.56 million head, year-over-year placements were down 7 percent. Average trade estimates were for a 9.4 percent decrease.
“While this may be viewed as somewhat bearish given it came in above analysts estimates, it is important to keep in mind the magnitude of the decline,” Steve Meyer and Len Steiner said in their Daily Livestock Report on Monday.
Despite the softer-than-expected declines, cattle on feed marked the 24th consecutive month of year-over-year declines and year-over-year placements were down for the fifth consecutive month, USDA reported.
In the last three months, feedlots have reduced overall placements by 363,00 head compared to year-ago levels, and those cattle are skewing significantly lighter than last year and the five-year average, Meyer and Steiner report.
Cattle on feed on Aug. 1 was the lowest August number since 2009, and fall feedlot supplies will remain tight as feedlots are currently feeding fewer heavyweight feeder cattle, Derrell Peel, livestock marketing specialist with Oklahoma State University, said in Monday’s Cow/Calf Corner newsletter.
July placements under 700 pounds were up 3.8 percent from last year, and cattle weighing over 700 pounds were down 14.6 percent. Total placements April through July were down 6.4 percent, with cattle weighing under 700 pounds up 5.9 percent and those weighing over 700 pounds were down 13.4 percent from year earlier levels, he said.
Marketing of fed cattle in July, at 1.79 million, were down 9.3 percent from a year earlier and the lowest July marketings since the series began in 1996. It was a bigger decline than analysts expected but very much in line with the July decline in steer and heifer slaughter, Meyer and Steiner said.
Since July 1, steer slaughter has been down 9 percent and heifer slaughter has been down 16.3 percent. Year to date, steer slaughter is down 3.1 percent and heifer slaughter is down 8.5 percent, Peel said.
Fed cattle supplies are at their lowest point in the year and will remain limited in the coming months, Meyer and Steiner said.
So far, beef demand is holding up and supporting record-level cattle and beef prices. Fed steer prices last week averaged $152.82 per hundredweight, down $2.10 per hundredweight from a week earlier but up $28.28 from a year earlier, according to USDA.
Choice beef cutout averaged $251.96 per hundredweight last week, down $5.39 per hundredweight but up $56.30 from a year ago. The grocery store price for a pound of choice beef in July averaged $5.95, record high for the sixth consecutive month and up 3.4 cents from June and 62 cents from July 2013.