August Cattle on Feed Report Recap

USDA’s National Agricultural Statistics Service released their monthly Cattle on Feed report Friday (Aug 23). The report showed that 10.026 million head of cattle were in feedlots with 1,000 head or larger capacity on August 1, 2013. This was 5.9% fewer cattle than August 1, 2012 and 1% less than the five-year average from 2008 to 2012. Market analyst were expecting a drop of 4.2% and the smallest guess pegged the on feed number at 5.6% lower than August 2012. So, the reported number was less than the lowest expectation, which will be viewed as rather bullish.

The smaller on feed number largely stemmed from a smaller number of cattle being placed. Placements during the month of July totaled 1.722 million head, 10.4% below last year and 7.8% smaller than the five-year average. Placements were well below expectations of a 2.5% decline with the smallest placement expectation coming in at minus 7.1%. The trend of placing heavy cattle continued this in July, however all weight groups registered a decline. The number of cattle placed at 700 pounds and over were down 3.7% from last year and those place under 700 pounds were down 19.4%. Similar to previous reports where heavy cattle outnumbered lighter placements, this could put pressure on nearby contracts since those cattle should take less time to finish. However, since this has been the trend for some time now it most likely is already factored into market prices. An interesting item to watch will be if or when the lull in lightweight placements show up in feedlots at a later point in time.

There were more marketings in July than last year and more than the average from 2008 to 2012. Total marketings in July totaled 2.000 million head, 4.5% above one year ago and 3.1% higher than average. The number was right in line with analysts’ expectations of a 4.4% increase.

Report Recap:

				Pre-report Estimates:
	(1,000 head)	vs. 2012	vs. 5-Yr Avg	Average	Range
Placed in Jul	1,722	-10.4%	-7.8%	-2.5%	-7.1%	–	11.6%
Marketed in Jul	2,000	4.5%	3.1%	4.4%	2.5%	–	6.1%
On Feed, Aug 1	10,026	-5.9%	-1.0%	-4.2%	-5.6%	–	-1.8%

Placements by state and weight:

	AZ	CA	CO	ID	IA	KS	NE
< 600 lbs.	N/A	N/A	20.0%	N/A	N/A	-29.4%	-35.7%
600-699 lbs.	N/A	N/A	25.0%	N/A	N/A	-28.6%	-21.4%
700-799 lbs.	N/A	N/A	-25.0%	N/A	N/A	-19.4%	0.0%
800+ lbs.	N/A	N/A	-42.9%	N/A	N/A	-5.9%	5.6%
TOTAL	4.5%	9.6%	-19.4%	11.4%	-7.7%	-18.5%	-7.3%
	OK	SD	TX	WA	Other [1]	U.S.
< 600 lbs.	N/A	N/A	-26.7%	N/A	-5.3%	-22.0%
600-699 lbs.	N/A	N/A	-11.8%	N/A	0.0%	-15.4%
700-799 lbs.	N/A	N/A	30.0%	N/A	0.0%	-3.2%
800+ lbs.	N/A	N/A	38.5%	N/A	-14.1%	-4.0%
TOTAL	-33.8%	-5.0%	-3.2%	2.5%	-15.1%	-10.4%
[1] Individual weight categories include states that are N/A