Higher Placements Weather Related

February 27, 2014 03:00 AM
Higher Placements Weather Related

By: Tim Petry, Livestock Economist, North Dakota State University Extension Service

USDA-NASS released the monthly Cattle on Feed report on February 22. The number of cattle and calves on feed for slaughter weight in the U.S. for feedlots with capacity of 1,000 head or more totaled 10.760 million head on Feb. 1. The inventory was 2.8 percent below Feb. 1, 2013, and marks the 18th consecutive month with lower cattle on feed numbers than the previous year. It was the lowest number of Feb. 1 cattle on feed since 2003.

Fewer cattle on feed numbers imply lower fed cattle slaughter and beef production ahead. The LMIC is projecting an over 6% decline in beef production for 2014. The wild card will be cow slaughter that declined in the second half of 2013 as U.S. pasture and range conditions improved. Parts of the Southern Plains are dry along with much of the Southwest including record drought in California. Parts of the rest of the U.S. cattle producing regions are less than a year removed from drought conditions, so ample spring and summer rainfall will be necessary for lower beef cow slaughter to occur.

Placements of cattle into feedlots during January totaled 2.029 million head, up over 8.5% from last year. That increase may sound surprising to some given the 1% smaller calf crop in 2013. That along with a 1.7% increase in beef replacement heifers, and fewer feeder cattle imports resulted in a 2.7% decrease in feeder cattle outside of feedlots on Jan. 1. However, dry conditions and cold temperatures exhausted small grains pasture in parts of Kansas, Oklahoma, and Texas. That caused many winter stocker cattle to move to market in January. The extreme drought in California also forced significant movement of winter grazing cattle into feedlots. Placements in California were up 27% over last year. USDA-AMS reported a 9% increase in nationwide feeder cattle auction receipts so far this year, similar to the increase in placements.

Increased marketings of an already shorter supply of calves and feeder cattle should lead to smaller placements in the future - again weather permitting. Shorter supplies will be supportive to prices that are at record high levels.

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