October Cattle on Feed

USDA released their monthly Cattle on Feed report this afternoon (Oct 19). Following last month’s decline in placements and cattle in feedlots, this month’s report shows the trend continuing. Cattle placed into feedlots during September with a capacity of 1,000 head or larger registered 2.004 million, down 18.8% from the same month in 2011. As has been noted in past COF discussions, the comparisons to last year can be deceiving since a large volume of cattle were placed due to the drought conditions in the southwestern U.S. The five year average from 2007-2011 for placements in September is 2.4 million head, so the current pace is still low by comparison (16.6% below the average). The placements number was expected to be 15% lower than 2011 so the reported value was 3.8 percentage points lower than the pre-report average. The lowest expectation was 19% lower so the reported value was just shy of dropping below the low end of the range.

The total number of cattle on feed October 1, 2012 was 10.989 million. This is 2.6% below last year and 1.9% above the average from 2007-2011. There are still a number of cattle lingering in feedlots from bloated placements during the summer months as drought conditions pressured much of the U.S. As these cattle move to market the cattle on feed number will fall below the five year average. Analysts expected cattle on feed to be 2.2% lower than 2011, so the reported value was in-line with this expectation.

Cattle marketed did not completely disappoint but was lower than expected (88.1% of 2011 compared to an expected 89.1%). Marketings, like placements, reflect a comparison to inflated values in 2011 due to the drought.

Cattle placed in all weight groups were lower. Those under 600 pounds were down 24.8% across the U.S. and were sharply lower Kansas and Texas, respectively 33.3% and 33.9% lower in these states. Middle weight group placements were down 14.5% and 11.9% for 600-699 pounds and 700-799 pounds respectively. In Texas, these weight groups were actually higher than 2011, but again the drought was pushing cattle into feedlots in Texas last year. Heavy cattle placements were down 20.2%, which was fairly consistent across states.

Pre-report Estimates:
(1,000 head) % of 2011 Average Range
Placed during Sep 2,004 81.2% 85.0% 81.0% 89.7%
Marketed during Sep 1,598 88.1% 89.8% 88.8% 92.8%
On Feed, Oct 1 10,989 97.4% 97.8% 96.8% 98.7%

Breakout by Weight Group

Weight Group Kansas Nebraska Texas Colorado US Total
<600 -33.3% -10.0% -33.9% 0.0% -24.8%
600-699 -22.7% -25.0% 4.0% -20.0% -14.5%
700-799 -25.0% -9.1% 17.6% -8.3% -11.9%
800+ -19.2% -18.5% -7.1% -26.7% -20.2%

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