Even with record and near-record high feeder cattle prices, the market will likely view Friday's Cattle on Feed report as neutral to bullish.
Feedlot placements in August (1.79 million head) were 11% less than the same time a year ago. That's the sparsest August placement since the series began in 1996. Average survey estimates ahead of the report pegged placements at 8.4% less. Close to a third of the placements (615,000 head) were 800 lbs. or heavier.
The inventory of all cattle and calves on feed Sept. 1 (9.9 million head) was 7% less than a year ago, compared to an average per-report survey estimate of 6.5% less.
Marketings in August (1.88 million head) were 4% less than a year ago. Average estimates were for a decline of 4.5%. That was the second-fewest August marketings since the series began in 1996.
There are fewer cattle to come, too.
Though the pace of beef cow slaughter has been easing, Nevil Speer at Western Kentucky says in this week’s BEEF Cow-Calf Weekly that beef cow slaughter through the first half of 2013 equaled about 1.6 million head. If seasonal slaughter trends (10-year average) hold for the rest of the year, he says it would mean beef cow slaughter of approximately 3.3 million head.
“…Based on annual data since 1996, that rate would translate to a decline in beef cow inventory of approximately 667,000 cows,” Speer says. “That pace would place next year’s starting inventory around 28.63 million beef cows.”
Moreover, analysts with USDA’s Economic Research Service explain in the September Livestock, Dairy and Poultry Outlook, “…if the ‘flash drought’ in the central U.S. persists, it could result in more cows going to slaughter and could temper any expansionary plans to retain beef cows or replacement heifers through the winter, as well as slowing or even reversing the decline in cow slaughter.”
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