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Cattle Supplies Lower, Prices Move Higher

September 23, 2013
By: Greg Henderson, Beef Today Editorial Director
cattle numbers take hit
  
 
 

August placements of cattle into feedyards were the lowest since 1996, according to the U.S. Department of Agriculture’s monthly Cattle on Feed report, another indication that U.S. cattle numbers are as tight as feared. Friday’s report provided more bullish news for the nation’s cattle feeders who have suffered with negative margins for nearly two years.

Feedyards placed 1.79 million cattle on feed during August, 7 percent below last year’s total. August marketings totaled 1.88 million head, down 4 percent from a year ago. On-feed inventories as of Sept. 1 totaled 9.9 million head, 7 percent below the same month in 2012.

Cash fed cattle traded at $124 per hundredweight last week, $1 higher than the previous week.

In futures trading at CME Group in Chicago, both Live Cattle and Feeder Cattle contracts opened higher Monday morning.

Declining feedlot placements are the result of several years of declining cattle supplies, which has produced a significant price rally for stocker and feeder cattle that now enters its fourth month. Yearling feeder cattle sold mostly steady to $2 higher at auction last week, with most of the gains found in the Southern Plains. Feeder cattle weighing 700 to 800 pounds traded at $155 to $162 per hundredweight at auctions in the Southern Plains.

USDA Market News reporter Corbitt Wall, St. Joseph, MO, says demand for feeder cattle remains "extremely good but availability of grass yearlings is running out and commercial feedlots pushed the market where they were available in Texas, Oklahoma and Kansas. Recent competition from a large influx of farmer feeders to the north has left more empty pens than normal in the corporate feedyards."

Calf markets traded weak to $5 lower last week, with the greatest declines seen in the Southeast. Market analysts say the softer calf and stocker markets are due chiefly to the distractions from fall field work that has taken many farmers out of the market.

"Southern Plains wheat growers are busy planting next year’s crop and don’t have the available time and man power it takes to care for newly purchased calf arrivals," Wall says. "However, the wheat pasture outlook is spectacular and calf buyers are sure to be armed with ‘go get ‘em’ orders as soon as the tractors are parked and the horizon starts to turn green."

 

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