January 2014 Cattle on Feed Report


A summary of the recent (January) Cattle on Feed report can be found at the following location:

http://blogs.msucares.com/agecon/

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December Cattle on Feed Report Recap


USDA released their monthly Cattle on Feed report this afternoon (Dec 20). The report revealed that 10.725 million head of cattle were in feedlots with 1,000 head or larger capacity on December 1, 2013.  This was 5.5% lower than December 2012 and 7.0% lower than the average from 2008 to 2012. Pre-report analysts were expecting a drop of 4.6% on average, and the lowest guess called for a 5.6% decline, so the reported value is lower than the lowest guess. Continue reading “December Cattle on Feed Report Recap”

November Cattle on Feed Report Summary


USDA’s National Agricultural Statistics Service released their monthly Cattle on Feed report Friday (Nov 22). The report revealed that 10.607 million head of cattle were in feedlots with a capacity of 1,000 head or more on November 1, 2013. This is a 5.7% decline from the same time last year and a 6.5% decline from the average over 2008 to 2012. Market analysts were expecting a 6.0% drop, so the reported value was very much in-line with this expectation. This marks the second lowest on feed number since the current version of this data series began in 1996 (with 1996 being the lowest). Continue reading “November Cattle on Feed Report Summary”

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

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

 

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

July Cattle on Feed Report Recap


USDA’s National Agricultural Statistics Service released their monthly Cattle on Feed report this Friday (July 19). The report revealed that 10.368 million head of cattle are in feedlots with a capacity of 1,000 head or more on July 1, 2013. The inventory of cattle on feed was a decrease of 3.2% from July 1, 2012, but a slight increase of 1.1% from the five year average from 2008-2012. Analysts were expecting a drop of 3.0% from 2012’s inventory, so the reported number is in-line with those expectations and well within the range of expectations. Continue reading “July Cattle on Feed Report Recap”