January Cattle On Feed Report Commentary


USDA released their monthly Cattle on Feed report this Friday afternoon (Jan 25). The report revealed that 11.193 million head of cattle were in feedlots with 1,000 head capacity or greater on Jan 1. This was a 5.6% decline from Jan 2012 and 3.0% below the five-year average. Pre-report expectations were looking for a 4.4% drop from the previous year and the 5.6% drop was just inside the low end of the range.

Placements during December were 0.5% lower than December 2011 and 0.2% below the five-year average at 1.664 million head. This number was below expectations of a 4.1% increase. The over assessment by analysts likely stemmed from increased placements in major feeding locations, which typically act as a barometer for the rest of the nation, as Kansas, Nebraska, Oklahoma and Texas all reported higher year-over-year placements. Heavy weight placements (over 800 pounds) were mostly steady in December and lightweight placements (under 600 pounds were much lower. Offsetting this, and bringing the total placement number up, was mid-weight, 600-699 and 700-799 pounds, placements, respectively up 7.8% and 5.3% across the U.S.

Marketings in December, though 1.7% lower than last year, fared better than expected. The average of pre-report analysts had marketings pegged at 6.8% lower than a year ago and the highest guess was looking for a 5% drop. When compared to the 2008-2012 average marketings were 0.5% higher.

Lower placements and better than expected marketings, all resulting in less cattle on feed than last year and lower than predicted, should provide a much need shot in the arm to cattle prices when markets open back up.

Report Summary:

Pre-report Estimates:
(1,000 head) vs. 2011 vs. 5-Yr Avg Average Range
Placed in Dec 1,664 -0.5% -0.2% 4.1% -3.8% 8.8%
Marketed in Dec 1,745 -1.7% 0.5% -6.8% -9.8% -5.0%
On Feed, Jan 1 11,193 -5.6% -3.0% -4.4% -5.8% -3.8%

Placements by Individual State:

AZ CA CO ID IA KS NE
< 600 lbs. N/A N/A -30.0% N/A N/A -6.7% 16.7%
600-699 lbs. N/A N/A 0.0% N/A N/A 0.0% 0.0%
700-799 lbs. N/A N/A 16.7% N/A N/A 0.0% 10.0%
800+ lbs. N/A N/A -22.2% N/A N/A 28.6% -7.7%
TOTAL 11.5% -18.0% -12.5% -27.8% 6.5% 4.3% 2.6%
OK SD TX WA Other [1] U.S.
< 600 lbs. N/A N/A -11.1% N/A -14.3% -10.0%
600-699 lbs. N/A N/A 33.3% N/A 5.9% 7.8%
700-799 lbs. N/A N/A 18.2% N/A -8.6% 5.3%
800+ lbs. N/A N/A 11.1% N/A -9.1% -0.8%
TOTAL 15.6% -8.1% 3.8% -43.2% -1.8% -0.5%
[1] Individual weight categories include states that are N/A
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