Home  »  Ag Sectors  »  Livestock

Cattle for market continue to decline

Carol Ryan Dumas
The number of cattle for the slaughter market continues to decline, with cattle on feed on Jan. 1 down 5 percent from a year earlier. The number of cattle in feedlots has averaged 6.2 percent lower than a year earlier for the last six months and 4.2 percent lower for the last 12 months

The number of cattle on feed in large U.S. feedlots is down 5 percent from a year earlier.

That’s 600,000 fewer cattle on feed than in Jan. 1, 2013, according to the USDA.

January represents the 17th straight month that the number of cattle on feed have been lower than the previous year, according to USDA statistics.

The number of cattle in feedlots has average 6.2 percent lower than a year earlier for the past six months and 4.2 percent lower for the past 12 months.

Another year-over-year drop was expected in the industry, but traders expected it to be slightly more, at 6 percent.

Some states showed large year-over-year decreases in feedlot inventories on Jan. 1, led by Texas, down 280,000 head. Other large declines included 100,000 head in Kansas, 80,000 head in Nebraska, 75,000 head in Oklahoma, 46,000 head in Washington state and 40,000 head in Colorado.

Several factors could be in play, starting with a lack of cattle, said Wilson Gray, extension livestock economist with the University of Idaho in Twin Falls.

In addition, high fed cattle prices are lending incentive for pulling cattle ahead earlier to take advantage of those prices, he said.

Given corn prices, farmer-feeders in the Midwest Corn Belt states with less capacity or pens they haven’t used in a few years could also be holding onto their feeder calves or acquiring feeder calves and feeding them corn for higher value, he said.

Heifer retention to rebuild the herd could also be playing a part in lower feedlot inventories. Higher cattle prices are fueling a lot of interest in rebuilding, and analysts expect Friday’s USDA cattle inventory report to show heifer retention up about 3 percent from a year ago, he said.

Bred heifers are bringing $1,800 to $2,000-plus, depending on the location, compared with a couple of years ago when they were selling for about $1,400.

The cattle on feed report shows the number of heifer and heifer calves on feed on Jan. 1 were down 237,000 head compared with a year ago.

Year-over-year feedlot inventories were down on Jan. 1 as more cattle were placed into feedlots in December than the trade expected. At 1.68 million, placements were up 1 percent from a year earlier, while the trade had predicted it would be down 1.9 percent.

Lower feed costs, higher fed cattle prices, feeder cattle imports, higher feedlot margins and plenty of capacity were likely factors, but weather issues also contributed, Gray said.

Placement increases were led by Washington state, up 19,000 head and 36 percent year over year. California placements were up 9,000 head and 18 percent. South Dakota was also up 9,000 head and 26 percent, and Idaho was up 6,000 head and 23 percent.

Increased placements in California are probably related to the drought, with moisture levels less than 20 percent of normal. There’s talk there of not even turning water on in some irrigation districts. That has a big impact in terms of growing feed, Gray said.

Drought concerns in the Northwest could also be a factor in higher placements in Washington and Idaho, and “too much” weather in South Dakota have influenced placements there, he said.

Other increased placements were seen in Nebraska, up 15,000 head; Iowa, up 14,000 head; Colorado, up 10,000 head; and Kansas, up 5,000 head.



User Comments

blog comments powered by Disqus