USDA’s monthly update shows fewer than expected cattle on feed at the start of the year, reflecting the continued contraction of the U.S. herd.
All cattle on feed in the U.S. as of January 1, 2013 were down 6% on the year at 11.193 million head, the fewest on the start of a year since 2010, with steer and steer calves declining 3% to 7.047 million and heifers and heifer calves dropping 9% to 4.070 million head. On average, analysts were expecting the on feed total to be 95.6% of a year ago, in a range of 94.2% to 96.2%.
Placements during December were 1.664 million head, 1% less than last year, and the seventh month in a row with smaller placements on feed because of negative margins and drought in some of the major feeding areas. Pre-report estimates ran from 96.2% to 108.8%, for an average of 104.1%. By weight, placements of cattle and calves weighing less than 600 pounds were 495,000 head, 600 to 699 pounders were 415,000 head, while placements for the 700 to 799 pound category were 379,000 head and placements of cattle 800 pounds and heavier were 375,000 head.
Marketings were pegged at 1.745 million head, 2% lower than a year ago, despite one less workday in December 2012 than in December 2011 and a greatly reduced slaughter on Christmas Eve. Analysts were projecting marketings at 93.2% of a year ago, with estimates ranging from 90.2% to 95.0%.
Other disappearances during December were 74,000 head, a 19% year to year decline.
Allendale’s David Kohli calls the numbers bullish for futures.
Cattle inventory numbers are out February 1 and the next cattle on feed report will be released February 22.