September Cattle on Feed Report Recap


USDA’s National Agricultural Statistics Service released their monthly Cattle on Feed report Friday afternoon (Sep 20). The report revealed that 1.788 million head of cattle were placed into feedlots with 1,000 head or larger capacity during August 2013 and 1.883 million head were sold over the same time frame. This left 9.876 million head in feedlots on September 1, 2013, the lowest since 2003 and the sixth smallest since 1996 when the data series began. The on feed number was 7.2% lower than 2012 and 3.9% lower than the average from 2008-2012. Cattle market analysts were expecting the total number of cattle on feed to decline 6.5% on average with the lowest guess looking for a drop of 7.3%, therefore the reported number was lower than the smallest expectation (by 0.1 percentage points). The lower than expected on feed number was the culmination of fewer head placed and more head marketed than analysts were projecting.

Placements during August were 10.9% lower than August 2012, 16.4% lower than the previous five-year average, and 2.5 percentage points below the average of the pre-report expectations (but still within the range of expectations). This marks the smallest placement number for the month of August since the Cattle on Feed report started in 1996 (the previous low was 1.993 million head in August 2005, which puts 2013’s number at 205,000 head lighter).  Placements across all weight groups were lower during August (in fact, 800+ pound placements in Nebraska were the only group to register a positive year-over-year change for those locations where weights are broken out). Arizona is the only state to show an increase in total placements compared to last year but keep in mind the southwestern region of the U.S. was still under heavy drought conditions. This marks the first month since February that placements above 700 pounds were lower than previous year placements, a telling sign that cattle are simply not out there.

Marketings during August were higher than expected by pre-report analysts, up 0.8 percentage points, but 3.7% lower than August 2012 and 2.1% below the average from 2008-2012.

Overall the report appears to be on the bullish side (I would argue very bullish, but I’ll leave that up to the market to decide on Monday). The final on feed number was not only lower than the average expectation but lower than the smallest projection. Placements registered their lowest since the data series began. Marketings, while below year-ago levels,came in better than expected (keep in mind selling cattle that do not exist is not possible; i.e., marketings SHOULD be lower since fewer cattle are around today). All-in-all, the market will likely respond positively on Monday, barring any other offsetting news coming out.

Report Overview:

        Pre-report Estimates:
  (1,000 head) vs. 2012 vs. 5-Yr Avg Average Range
Placed in Aug 1,788 -10.9% -16.4% -8.4% -13.5% +1.9%
Marketed in Aug 1,883 -3.7% -2.1% -4.5% -6.5%  0.0%
On Feed, Sep 1 9,876 -7.2% -3.9% -6.5% -7.3% -4.0%

Placements by weight and state:

  AZ CA CO ID IA KS NE
< 600 lbs. N/A N/A -16.7% N/A N/A -18.8% -21.4%
600-699 lbs. N/A N/A -20.0% N/A N/A -19.0% -13.3%
700-799 lbs. N/A N/A -10.0% N/A N/A -4.2% -16.7%
800+ lbs. N/A N/A -35.3% N/A N/A -7.7% 7.3%
TOTAL 27.8% -12.7% -23.7% -1.9% -13.2% -11.5% -6.4%
               
  OK SD TX WA Other [1] U.S.  
< 600 lbs. N/A N/A -12.5% N/A -16.7% -16.0%  
600-699 lbs. N/A N/A 0.0% N/A -20.0% -12.2%  
700-799 lbs. N/A N/A -9.1% N/A -6.7% -9.5%  
800+ lbs. N/A N/A -15.4% N/A -8.3% -7.5%  
TOTAL -29.9% -14.7% -9.1% -8.5% -10.2% -10.9%  
[1] Individual weight categories include states that are N/A

 

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