Market News

USDA reports decline in cattle placements

USDA’s most recent cattle on feed numbers are indicative of not only a smaller U.S. calf crop but also lower import numbers.

Derrell Peel, Livestock Marketing Specialist at Oklahoma State University, tells Brownfield the Mexican cattle industry has also been impacted greatly by drought, “Last year in particular, Mexican cattle imports were at the second highest level ever because of the drought there, primarily, as well as the strong market in the U.S. We pulled in a large number of Mexican cattle, but it wasn’t a sustainable level – they’re doing the same thing we are in that they are liquidating their herd and so those numbers have dropped dramatically just in the last few, based on the preliminary weekly data.”

Peel adds, “I look for Mexican cattle imports next year, in 2013, to be on the order of 700,000 head less, around half of what they were this year, probably.”

During October, placements of cattle onto feed were down 13% on the year at 2.180 million head, the fifth straight month with a year to year decline and the lowest for the month since the series of reports started in 1996. By weight, placements of cattle and calves weighing less than 600 pounds were 680,000 head, the 600 to 699 pound category accounted for 505,000 head, while the 700 to 799 pounders were 435,000 head, and cattle and calves weighing 800 pounds and above made up the remaining 560,000 head.

October 2012 marketings were 3% larger than October 2011 at 1.837 million head and the total number of U.S. cattle on feed as of the 1st of November was 11.254 million head, down 5% from a year ago.

Other disappearances were 78,000 head, 20% less than last year.

Allendale’s David Kohli says that even though the numbers look friendly, they’re probably already dialed into the futures market after CME live and cattle contracts finished higher Friday.

Derrell Peel discusses the numbers (4 Minutes, 40 Seconds, MP3)