November Cattle on Feed Report

USDA released their monthly Cattle on Feed report Friday afternoon (Nov 16). Cattle placed into feedlots during October with a capacity of 1,000 head or larger registered 2.180 million head, down 12.5% from the same month in 2011 and down 13.7% from the prior five-year average. This marks the fifth straight month of year-over-year declines in the number of cattle placed. The average of analysts surveyed prior to the report expected placements to be at 2.176 million head, down 12.7% from a year ago, so the actual number was in-line with this expectation.

The total number of cattle on feed November 1, 2012 was 11.254 million head. This was 5.4% below last year and 1.7% below the average from 2007-2011 (the first time the current level has been below the five-year average since April 2011). Pre-report estimates looked for the number on feed to be 11.211 million head, down 5.7% from last year, so, again, the actual number was right on target.

Cattle marketed were higher than 2011 by 2.8% at 1.837 million head. Analysts has expected marketings to be 2.6% above 2011 so, as with placements and all cattle on feed, the actual reported value was in-line with expectations.

Cattle placed in all weight groups were lower from a national perspective. Those under 600 pounds were down 19.0% across the U.S. and were sharply lower Kansas and Texas, respectively 30.4% and 34.0% lower in these states. Middle weight group placements were down 14.4% and 10.7% for 600-699 pounds and 700-799 pounds respectively. Cattle placed over 800 pounds were down only 2.6%. Despite being down from a year ago, heavy placements – those over 800 pounds – were down by a smaller amount than light placements, down 15.5%, indicating that near term cattle supplies could remain large as the influx of light placements from previous months  coupled with these current heavy placements become market ready.

The report matched pre-report expectations fairly well and will likely be viewed as neutral, but keep an eye on nearby live cattle futures prices as the large number of market ready cattle could pressure prices for the next few months.

Cattle on Feed Report Summary:

Pre-report Estimates:
(1,000 head) % of 2011 Average Range
Placed during Oct 2,180 87.5% 87.3% 83.3% 92.0%
Marketed during Oct 1,837 102.8% 102.6% 100.8% 103.5%
On Feed, Nov 1 11,254 94.7% 94.3% 93.5% 96.0%

Breakout by Weight Group (percent change from 2011):

Weight Group Kansas Nebraska Texas Colorado US Total
<600 -30.4% 2.7% -34.0% 8.3% -19.0%
600-699 -20.8% -27.8% 0.0% -10.0% -14.4%
700-799 4.3% -27.3% -13.0% -30.0% -10.7%
800+ -5.6% 0.0% -14.3% -28.6% -2.6%

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