SKEWING toward the low-end of market analysts’ pre-report estimates, the U.S. Department of Agriculture’s latest Cattle on Feed report showed a fed-cattle inventory much smaller than a year ago, with August feedlot placements setting a record low.
USDA report cattle and calves on feed totaling 9.9 million head as of Sept. 1, a fed cattle inventory 7% smaller than last year’s figure. Analysts had expected an inventory figure roughly 93.5% of last year’s, so the report showed a slightly smaller inventory than anticipated.
Placements into feedlots, however, marked a decidedly different story, coming in well below the average of analysts’ pre-report guesses.
Placements in feedlots with capacity of 1,000 or more head during the month of August totaled 1.79 million, 11% fewer head than were placed during the same month last year. August placements were the smallest since the data series began in 1996.
Analysts had expected placements to be 91.6% of last year’s total, so an 89% figure was closer to the bottom end of expectations than to the average of analysts’ predictions. This comes on the heels of an August Cattle on Feed report that likewise showed placements to be smaller than the trade had estimated, further illustrating the “long tail” of the multi-year drought plaguing much of cattle country.
Fed cattle marketings in August totaled 1.88 million head, down 4% from the previous August, and the second-lowest since the data series began in 1996. Analysts had expected marketings at 95.5% of last year, fairly close to the actual figure.
“All three of these categories were missed slightly by the average of analysts’ predictions, to the friendly side of the cattle market,” said Farm Progress economics editor John Otte. “Friday’s report further deepens the potential hole in December-March fed cattle marketings. Holes in marketings fuel predictions of higher prices to come.”