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USDA’s monthly Cattle on Feed report was pegged at 10.4 million head on July 1, 1% above last year’s total.
Cattle feeders are walking a tight rope as fed cattle prices continue to decline.
Missing from the slate of late July USDA cattle reports was the July Cattle report which would have provided an indication of continued herd rebuilding, heifer retention and the size of the 2016 calf crop.
Mid-summer shipments of cattle off grass pastures to feedlots is in full-swing.
Now is the time to start thinking about marketing opportunities for calves this fall.
Summer brings bullish and bearish news in cattle markets.
The longer cattle continue to trade sideways the more explosive price movement could be.
Although beef, as a by-product of the dairy industry, rarely exhibits a major influence on dairy industry production decisions, it is important to note that dairy animals contribute a significant portion of total animal slaughter and beef supply.
The impact of dairy on beef markets varies over time depending on long term trends and short term market conditions in both beef and dairy markets.
USDA released their June Cattle on Feed report this afternoon. It said there were 2.2% more cattle on feed than on June 1, 2015.
Where do we go from here? After a rough ride so far this year, one can only imagine what lies ahead for feeder cattle prices the rest of 2016.
Grain futures were lower Thursday in early trading on the Chicago Board of Trade.
Concerns about livestock prices took some air out of the Purdue/CME Ag Economy Barometer, pushing the new index down to 97 in May from April’s 106.
Will prices continue to decline, or will they trade steady or find support between May and October? That is a tough question at this point, but it is hard to imagine further significant declines at this time.
The latest numbers in the Cattle on Feed report were quite surprising, particularly with regard to placements.
USDA’s May Cattle on Feed report said there were 1.3% more cattle on feed than a year ago. April placements were up a surprising 7.5% and April marketings were up 1.2%.
It seems certain that herd expansion has slowed to a snail’s pace compared to one year ago, but from a historical standard, expansion is likely still moving at a fairly rapid clip.
Cattle on feed continues to increase, while drought conditions go away in the Northern and Southern Plains.
Monthly fed cattle net returns have been negative since December 2014. A few months ago, it appeared that we would climb above breakeven this spring. However, that was before the recent drop in fed cattle prices.
Recent changes in beef production have implications for the timing and possibly for total beef production for 2016.
Feeder futures have become increasingly volatile in ways that often appear unrelated to market fundamentals.
It appears herd expansion has tapered off as feedlots start to increase inventories with heifers.
Less beef was shipped to Mexico, Canada and Philippines than last year.
Winter and spring rains across much of Texas and the country have created good conditions for the cattle market.
Pork got top billing this week in grocery stores with Easter hams selling better than beef.
The latest Cattle on Feed report pegs March 1 feedlot inventories at 10.77 million head, 101 percent of year ago levels.
The latest Cattle on Feed report, released March 18th, was an interesting one, especially for placements. Placements have been, arguably, the most interesting number for many months.
Producers can be forgiven if they seem to be experiencing a case of déjà vu, as feeder and fed cattle prices are currently at about the same levels as in late 2013 after a 26-month rollercoaster ride in the markets.
There will be no cattle inventory reports released by USDA’s National Agricultural Statistics Service this summer due to budget cuts.
As the cow herd continues to rebuild feedlots carry on with business seeing fewer calves in pens.