April Cattle on Feed

*Updated April 22: I had an error in my calculation for March marketings.*

To say the report was a shocker might be an understatement. Placements in March were well above expectations at 1.899 million head, up 6.0% from last year and much higher than the most pessimistic guess from pre-report analysts. Marketings were off too at 1.771 million head, down 7.7% from last year, while analysts expected marketings to be down 4.9%. This left the number of cattle on feed at 10.909 million head, down 5.0% from last year and above the average pre-report expectation that looked for a drop of 6.1% compared to April 1, 2012.

The increased placements largely stemmed from Kansas and Texas, up 13.3% and 25.6% respectively. These two states are major players in the wheat grazing world and keep in mind February was not the best for wheat. It is highly likely that cattle were lighter than needed during February and producers held them longer and shipped them into feedlots during March (February 2013 placements were the lowest on record). Taken together, February and March placements totaled 3.381 million head. Analysts expected 3.318 million over these two months. Over the two month period the expectation was for placements to drop 5.3% compared to last year, while the actual amount of placements was 3.7% lower. So, in short, the March placements number was surprising at first but does make sense after some thought. Unfortunately, the market will most likely make a correction when they reopen.

Listen to our podcast that attempts to shed more light on the report by visiting here or, for iTunes users, here.

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Pre-report Estimates:
(1,000 head) vs. 2012 vs. 5-Yr Avg Average Range
Placed in Mar 1,899 6.0% 4.3% -0.9% -7.9% 3.2%
Marketed in Mar 1,771 -7.7% -6.1% -6.5% -7.6% -4.9%
On Feed, Apr 1 10,909 -5.0% -3.2% -6.1% -7.3% -4.5%

Placements by Weight and State: 

< 600 lbs. N/A N/A -16.7% N/A N/A 0.0% 10.0%
600-699 lbs. N/A N/A 20.0% N/A N/A -7.7% -14.3%
700-799 lbs. N/A N/A 22.2% N/A N/A 4.0% -8.3%
800+ lbs. N/A N/A -8.3% N/A N/A 40.0% -12.5%
TOTAL 18.5% 5.7% 3.1% -23.5% -2.7% 13.3% -9.1%
OK SD TX WA Other [1] U.S.
< 600 lbs. N/A N/A 9.7% N/A 5.3% 5.1%
600-699 lbs. N/A N/A 27.8% N/A 0.0% 5.0%
700-799 lbs. N/A N/A 43.5% N/A -15.8% 8.0%
800+ lbs. N/A N/A 28.6% N/A -5.4% 5.3%
TOTAL -1.8% -28.9% 25.6% 0.0% -3.2% 6.0%
[1] Individual weight categories include states that are N/A

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