Ron Plain: Cattle On Feed

The April cattle on feed report is bearish. USDA said the number of cattle on feed in large feedlots at the start of April was up a slim 0.05% compared to April 2013. The pre-release trade forecast was for the on-feed number to be down 1.0%. This is the fifth month in the last six with more cattle on feed than a year earlier.

March placements of cattle into large feed yards (over 1,000 head capacity) were 0.4% higher than in March 2014. The 1.809 million head placed was the most for any March since 2013. The average of pre-release trade forecasts was for March placements to be down 4.4%.

The Livestock Marketing Information Center put the average returns for fed steers marketed in March at a negative $295 per head. March was the fourth month in a row with red ink.

USDA said marketings of fed cattle from large feed yards during March totaled 1.631 million head, down 1.7% compared to March 2014, and the lowest March since before USDA started this data series in 1996. The trade predicted March marketings would be down 1.9%. Federally inspected steer and heifer slaughter was down 2.4% in March.

The calculated average weight of cattle placed on feed during March was up 2.0% from March 2014. The number of cattle placed on feed weighing less than 600 pounds was down 14.1% from the previous March. Placements of feeders weighing 600 to 700 pounds were down 5.2%; placements weighing 700 to 800 pounds were down 3.6%, but placements weighing more than 800 pounds were up 16.1% compared to a year earlier. The big placement of heavy weight cattle compared to the lighter weight categories implies placements were driven more by backgrounders pushing cattle onto feed than by feedlots pulling.

The number of steers on feed was up 5.4%. The number of heifers on feed was down 10.1%. That indicates a broad effort by cow-calf producers to expand the cow herd.

Choice beef prices at retail averaged $6.282 per pound during March. That was up 2.2 cents from February and up 56.2 from a year ago.

Source: AGEBB