Livestock Market News—Week Ending August 26, 2011 Source: www.aragriculture.org According to John D. Anderson, Ph.D., Senior Economist, American Farm Bureau Federation: August Cattle on Feed. USDA released their monthly Cattle on Feed (COF) report last Friday. Key numbers from the report, along with pre-report expectations are shown in Table 1. Table 1. August Cattle on Feed Summary: Actual vs. Pre-Report Figures
% of Previous % of Previous Pre-Report Estimates Pre-Report Estimates
1,000 head Year Average Range
On Feed August 1 10,626 107.6 107.5 103.8 – 109.2
July Placements 2,153 122.5 116.9 106.4 – 126.6
July Marketings 1,908 100.4 96.3 94.7 – 98.0
 *Source: Dow-Jones Newswires through the Livestock Marketing Information Center.
The industry continues to wring a remarkable volume of cattle out of the countryside. The August on-feed total is the third highest figure for August since this particular COF series began in 1996. Placements also were well to the high side of expectations, pushed along to no small extent by the historically awful drought conditions prevailing in Texas and Oklahoma as well as large portions of surrounding states. While placements were up in all weight categories, the distribution was skewed toward the light end. Placements in the under-600-pound weight category were fully 50% higher than a year ago. This compares to about 6% higher placements in the over-800-pound category. Cattle weighing less than 600 pounds accounted for about 29% of July placements nationally. Historically, the under-600-pound class would account for about 24% of July placements. Using the mid-point of each weight class (as well as 550 pounds for under 600 pounds and 850 pounds for over 800 pounds), the calculated average placement weight works out to 702 pounds, 17 pounds less than a year ago. The state break-down on placements also shows evidence of weather effects. In Texas and Oklahoma, placements were 154% and 176% of 2010 placements, respectively – by far the largest increases in any of the 11 reported states. By contrast, Nebraska placements were up by a modest 5%. Placements in Iowa and South Dakota were actually substantially lower than last year: down 13% and 33%, respectively. It looks like high feeder calf and corn prices encouraged many of that region’s farmer/feeders to opt out of feeding – at least for now. While the on-feed and placement figures were large, they were not entirely unanticipated. The on-feed figure was right in line with average pre-report sentiment. Placements were above the average pre-report estimate, but were within the range of pre-reports (which clearly once again reflected a lack of consensus). On the other hand, July marketings exceeded everybody’s expectations, coming in fractionally higher than a year ago. This appeared to have helped mitigate the impact of what otherwise would have been a decidedly bearish report. The market opened near steady on Monday following the report. Source: Livestock Marketing Information Center (www.lmic.info)