US Sept cattle placements seen up as feed costs ease

Wed Oct 16, 2013 6:06pm EDT
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* WHAT: USDA Cattle on Feed Report
    * WHEN: Friday at 2 p.m. CDT (1900 GMT
    * U.S. gov't shutdown could cancel Friday's report
    * Oct 1 feedlot cattle supply seen down 7.3 percent
    * Sept placements seen up 1.6 percent year-on-year
    * Sept marketings seen up 3.9 percent year-on-year

    By Theopolis Waters
    CHICAGO, Oct 16 (Reuters) - The number of cattle placed in
U.S. feedlots likely rose last month as reduced corn costs
allowed feedyards to purchase more young cattle for fattening,
according to most analysts polled by Reuters.
   They said higher prices paid for cattle in September provided
incentive for ranchers to move cattle to feeding pens.
   Some analysts, however, believe sufficient grazing pasture
and fewer available feeder cattle dropped last month's
placements below the September 2012 level.
    The U.S. Department of Agriculture's cattle-on-feed report,
which is scheduled for 2 p.m CDT (1900 GMT) on Friday, likely
will not be issued due to the U.S. government shutdown, analysts
    "Even if the government reopens, its going to take four to
five days to get the wheels in motion again," said U.S.
Commodities analyst Don Roose.
    Relying on historical cattle data analysts, on average,
expected the report to show September placements at 101.6
percent of a year ago, or 2.036 million head. If accurate, it
would be the second lowest placements for the month since USDA
began the current data series in 1996.
    Roose said feed costs continued to recede, which made it
attractive for feedlots to bring in young cattle. 
    On the other hand, the "shallow feeder cattle pool"
eventually pushed those prices to record highs, partly
offsetting the improvement in feedlot profits during September,
he said.
     Last month, Chicago Board of Trade corn futures 
averaged $4.72 per bushel, which was down from $4.92 5/8 in
    The Denver-based Livestock Marketing Information Center
(LMIC) calculated feedlots in September, on average, lost $34
per head on cattle sold to meat companies. That compares with a
loss of $92 in August and extends their streak of losses to 29
    "September and October are usually your biggest months for
placements as cattle transition from pastures to feedlots as
quality grass slowly deteriorates before winter," said
University of Missouri livestock economist Ron Plain. He
projected last month's placements up 2.3 percent from a year
    Conversely Rich Nelson, chief strategist with Allendale Inc,
suspects September placements slipped 1.2 percent year-over-year
because of comparisons made to a much-smaller placement result
in September 2012.
    LMIC director Jim Robb declined to participate in this
month's Reuters survey.
    He said to do so would be a "disservice" to traders and
would send the wrong message to lawmakers who might conclude
that the industry can do without the USDA reports.
    "Prior government shutdowns have always produced major
reports, including the cattle-on-feed. Past government reports
are the key inputs in doing the pre-report estimates," said
    Analysts, on average, expected the report to show the Oct 1
feedlot cattle supply at 92.7 percent of year ago, or 10.187
million head. 
    Fewer cattle are in feedlots after multi-year droughts in
the United States, drove feed costs to all-time highs last
summer. Several years of high-priced feed contributed to the
gradual decline in the U.S. herd to its smallest level in 61
    USDA monthly cattle report is expected to show cattle
marketings, or the number of animals sold to packers in
September, at 1.660 million head, up 3.9 percent from a year
    There was one more week day to slaughter cattle last month
than in September 2012 and less cattle are available than a year
earlier, analysts said.