February Cattle on Feed Report Recap


USDA released their monthly Cattle on Feed report Friday afternoon (Feb 24).  The report revealed that more cattle were on feed February 1, 2012 than the same time last year, while less cattle were placed on feed durring January 2012 than the same month in 2011.  In feedlots with capacities of 1,000 head or more, there were 11.811 million head of cattle, 2.1% above February 1, 2011.  This was mostly expected as the average of pre-report expectations had the number pegged at an increase of 2.5%.  The reported on feed value was rather close to the low end of estimates, so this could bode well for prices when markets open on Monday; however since it was within the range of estimates any positive move will be tempered.

Placements were 2.2% lower than January 2011 at 1.847 million head.  This follows last month’s report showing lower placements.  The reduction in available feeder cattle appears to FINALLY be showing up.  Drought conditions and higher prices since the Spring of 2011 pushed more cattle into feedlots than is typically experienced.  This has led to a dwindling supply that will shape market conditions for many months ahead. (Keep in mind the futures market has taken this into account already, as can be seen in the continually higher prices as opposed to the typical seasonal ups and downs during the year.)  Placements of cattle less than 600 pounds was markedly higher in Kansas during January (70,000 head, up 27.3%); however this was more than offset by lower placements across other weight groups (340,000 head, down 10.5%).  Placements of cattle under 700 pounds was lower in Texas by 14.5%, at 235,000 head, and heavy placements were higher by 6.5% at 165,000 head.  Nebraska placements across weight groups was uneven as under 600 pound and 700 to 800 pound placements were lower – respectively at 60,000 and 120,000 head, down 14.3% and 7.7% – while 600-700 and 800+ weight placements were higher at 110,000 and 140,000 head, respectively, up 4.8% and 12.0%.

-Recap-

Pre-report Estimates:
(1,000 head) % of 2011 Average Range
Placed during Jan 1,847 97.8% 98.3% 94.2% 101.4%
Marketed during Jan 1,816 102.4% 99.8% 94.2% 103.7%
On Feed, Feb 1 11,811 102.1% 102.5% 102.0% 103.3%
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