FEEDLOT PLACEMENTS REMAIN LARGE USDA-NASS reported that the number of cattle on-feed as of April 1, 2011 was 5 percent above a year ago. Placement of cattle into feedlots during March was bolstered by drought in the Southern Plains and feeders bidding aggressively for cattle to replace cattle closed-out at profitable levels. Southern Plains placements continued to be supported by feeder cattle imported from Mexico, which from January through mid-April were the largest since 2001. Indications are the Mexican feeder cattle went directly to U.S. feedlots due to the lack of pasture in both countries.
The surprise in the report was the large year-on-year surge in heavyweight (over 800 pounds) cattle placed into feedlots during March. Importantly, those cattle will reach market weight this summer quarter and were 105,000 head (22%) above 2010’s. Reflecting those heavyweight placements, at the LMIC, summer quarter slaughter forecasts were raised and price forecasts lowered slightly. Still, fed cattle prices this summer are expected to average fully 18% above a year ago supported by strong demand (domestic and foreign) for both beef and byproducts.
A shortage of available Canadian slaughter steers and heifers persisted in March, so U.S. packers filled the void with domestic cattle. U.S. fed cattle marketings remained aggressive in March, increasing 4.5 percent compared to a year earlier.
The recent Cattle on Feed reported a quarterly breakdown of the number of steers versus heifers in commercial feedlots. As of April 1, steers on-feed were over 440,000 head (nearly 7 percent) above a year ago while heifers were up much more modestly (2 percent). It’s still too early to draw implications from those data about breeding herd stabilization this year. The market has begun sending cow-calf operations clear price signals in an attempt to begin the beef cowherd expansion process. Of course, pasture and range conditions this summer will be a key variable, especially in the Southern Plains.
Source: Livestock Marketing Information Center (www.lmic.info) and UofA