October Cattle on Feed Report


First, if you visited last week and read about the new location for these market news and notes but the links did not work, you were not alone. I was under the impression that the new website was up and running but have since learned it is another week or two away. I AM VERY, VERY SORRY FOR THE CONFUSION!

** ** ** ** **

Now to the delayed Cattle on Feed report that was released yesterday afternoon (Oct 31) —

If you were not aware, the report was originally scheduled to be released October 18, 2013 but the shutdown delayed the release (at least we still got this as other reports were canceled). The report revealed that 10.144 million head of cattle were on hand in feedlots with 1,000 head or larger capacity as of October 1, 2013. This was 7.7% below October 1, 2012 inventories and 6.0% lower than the average number of cattle on feed October 1 from 2008 to 2012. Pre-report expectations called for on feed numbers to be 7.4% lower so the reported inventory is very much in-line with these expectations.

Placements during the month of September totaled 2.025 million head, up 1.0% from last year but 12.8% lower than the five year average for September placements from 2008 to 2012. Keep in mind that September 2012 placements were the lowest on record and 2013’s value is now the second lowest. Analysts projected a 0.7% increase in placements but the range of pre-report expectations went from -2.5% to +7.0%, so this placements number was largely unknown. Still, the final talley was close to the average.

Placements by weight and state show that, as has been the case for a while now, lightweight placements were lower (down 6.9% at 810,000 for cattle placed less than 700 pounds) and heavy placements were higher (up 7.1% at 1.215 million for cattle placed weighing more than 700 pounds). From June through August we were seeing fewer lightweight cattle being placed while heavy placements were coming in close to normal levels. The question we asked then was were these cattle being held back and possibly would show up later as heavy placements or were a large number of heifers being pulled for replacement. It appears as though the answer to this falls into the the territory of yes and yes. The October report provides the quarterly inventory by class (steers, heifers, and cows/bulls) and this information shows that heifer inventories totaled 3.662 million head, 7.7% lower than October 2012 and 14.8% lower than 2011, while steers totaled 6.442 million head, down 7.4% from October 2012. We typically see the number of steers and heifers increase from July to October, respectively by about 5% and 7%; however, this year both declined but heifer number fell at a larger clip (1.3% decrease for steers versus 3.1% decline for heifers). So, both steer and heifer inventories were smaller, but we are seeing signs of increased heifer retention.

The number of cattle marketed during September totaled 1.695 million head, up 6.1% from September 2012 and 3.6% below the average from 2008 to 2012. Pre-report expectations called for marketings to be 4.3% above 2012’s level so the reported value was above expectations. There were two pre-report guesses (out of 11) that called for marketings to be 6% or higher and so the 6.1% increase should be viewed as positive.

In summary, total cattle on feed and placements were in-line with expectations while marketings were better than expected. Even though placements were above 2012, when taken into historical perspective they remain small. Overall, the future continues to point toward smaller and smaller supplies of cattle (and therefore beef) as has been expected for some time now.

Summary of the report:

Pre-report Estimates:

(1,000 head)

vs. 2012

vs. 5-Yr Avg

Average

Range

Placed in Sep

2,025

1.0%

-12.8%

0.7%

-2.5%

7.0%
Marketed in Sep

1,695

6.1%

-3.6%

4.3%

0.1%

6.7%
On Feed, Oct 1

10,144

-7.7%

-6.0%

-7.4%

-8.4%

-6.3%

Breakdown by State and Weight:

AZ

CA

CO

ID

IA

KS

NE

< 600 lbs.

N/A

N/A

-12.5%

N/A

N/A

-12.5%

-16.7%

600-699 lbs.

N/A

N/A

0.0%

N/A

N/A

0.0%

16.7%

700-799 lbs.

N/A

N/A

-9.1%

N/A

N/A

14.3%

5.0%

800+ lbs.

N/A

N/A

-22.7%

N/A

N/A

9.5%

22.7%

TOTAL

15.0%

0.0%

-15.6%

1.6%

13.5%

4.0%

10.6%

OK

SD

TX

WA

Other [1]

U.S.

< 600 lbs.

N/A

N/A

0.0%

N/A

-8.3%

-7.8%

600-699 lbs.

N/A

N/A

-15.4%

N/A

-16.7%

-5.6%

700-799 lbs.

N/A

N/A

15.0%

N/A

7.1%

8.1%

800+ lbs.

N/A

N/A

7.7%

N/A

2.6%

6.5%

TOTAL

17.5%

-14.0%

0.0%

-19.6%

-23.5%

1.0%

[1] Individual weight categories include states that are N/A
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