Cattle on feed up 3 percent from 2011

Jan 27, 2012

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Last week’s USDA-issued cattle on feed report was in keeping with earlier predictions. Cattle on feed were up; placements were down due to reduced supplies of feeder cattle. Fed cattle marketings were down slightly with one less trading day which put the marketing rate in line with projections. Future predictions include very tight supplies heavily dependant on weather in the upcoming months. High breakeven prices for feedlots due to high feed costs, coupled with lighter cattle needing longer feeding to get to market size, are also concerns for the future.

As of Jan. 1, 2012, cattle on feed is up 3 percent as compared to Jan. 1, 2011, numbers. According to the National Agricultural Statistics Service, cattle and calves on feed in American feedlots with capacities of 1,000 head or more totaled 11.9 million. These are the highest numbers in four years, and the third highest numbers in six years.

The January 2012 numbers are compared to last year’s 11.55 million. Of the 2012 cattle on feed numbers, 7.28 million—or 61 percent—were steers or steer calves, up 1 percent from 2011. Heifers and heifer calves represented 4.5 million head on feed—or 38 percent—which is up 6 percent from 2011.

State-by-state cattle on feed saw growth in most states. Washington had the highest increase of 11 percent more cattle on feed on Jan. 1, 2012, than on Jan. 1, 2011. California was a close second with a 9 percent increase. Other states which saw increased 2012 cattle on feed numbers or held steady from their 2011 numbers included Arizona, Colorado, Nebraska, Oklahoma, South Dakota and Texas. Kansas, Iowa and Idaho saw slight decreases in their 2012 numbers at 1 percent, 3 percent and 4 percent, respectively.

Cattle placed on feed were down 6 percent in December 2011 as compared to December 2010 numbers, with 1.68 million head placed in 2011 versus 1.79 million placed in 2010.

Most states had significant reductions in cattle placed on feed, with Arizona carrying the greatest decrease at 28 percent and Texas having the least decrease at 5 percent. California’s and Nebraska’s 2011 numbers held level with their 2010 numbers. The only states to see increases in cattle placement were Colorado, with 6 percent, and Washington, with 22 percent.

Placement of cattle by weight categories shows a distinct trend toward lighter cattle. Calves less than 600 pounds (lbs.) were placed in greater numbers in all reported states and nationwide for December 2011 versus December 2010. Cattle in the middle weights of 600 lbs. to 699 lbs. and 700 lbs. to 799 lbs. were placed in fewer numbers across all reported states and nationwide. Numbers were mixed for placement of cattle over 800 lbs. with Texas and Colorado seeing growth while Kansas, Nebraska and the nation saw decreases.

Derrell Peel of the Oklahoma State University Extension office also commented on the trend towards placing lighter animals. “The light cattle placements are up, not because that’s what feedlots want, but that’s just what’s available. They are trying to prop up numbers on the short run, but it’ll hurt in the long run. We’re trading against the future and those placement levels will get harder and harder to maintain.”

Jim Robb, director of the Livestock Marketing Information Center, commented that the situation of cyclically low placements will force producers to seek other profit opportunities from their land, either for crops or for recreation.

Fed cattle marketed for slaughter was down 2 percent for December 2011 versus December 2010, though considerable variation existed from state to state.

Total number marketed in December 2011 was 1.8 million head versus December 2010’s 1.83 million.

States either saw increases or decreases in 2011 with most movement being significant. States with increased numbers of fed cattle marketed were Arizona with 38 percent, Washington with 15 percent, Idaho with 14 percent, Texas with 8 percent and Colorado with 3 percent. States with decreased numbers were Iowa down 21 percent, Oklahoma down 10 percent, California down 9 percent, Kansas down 7 percent, and Nebraska and South Dakota down 5 percent each.

Projections of the immediate future for beef in drought-stricken areas like Texas and Oklahoma depend heavily on the weather, according to Peel. “Supplies are going to be very tight or extraordinarily tight. If the drought keeps up, producers are going to have to reduce their herds again. But if we get rain, everyone’s going to hold onto every heifer they can to rebuild their herd. We’ll either be a major seller of females, or major buyer of females. It all depends on if we get a spring.”— Kerry Halladay, WLJ Editor