Chicago | Reuters — The number of cattle moved into U.S. feedlots in January slipped one per cent from last year, according to a government report on Friday, nearly matching average industry forecasts.
Feedlots were cautious about buying calves, or feeder, cattle while struggling to recoup 14 straight months of lost profits, partly blamed on those once-expensive feeder cattle, said analysts.
January 2016’s placements compared to much-smaller placements a year earlier, when fewer animals were available as the cattle herd continued to recover from severe several years of drought.
Cattle that entered feedlots last month will arrive at packing plants beginning around June, the analysts said.
Friday’s U.S. Department of Agriculture report showed January placements at 1.779 million head, down one per cent from 1.789 million last year, and close to analysts’ average forecast of 1.771 million.
USDA put the feedlot cattle supply as of Feb. 1 at 10.709 million head, which nearly matched 10.713 million a year ago. Analysts, on average, had forecasted a marginal decline.
The government said the number of cattle sold to packers, or marketings, dropped two per cent in January from a year ago, to 1.589 million head. It was the lowest result for the month of January since USDA started tabulating the data in 1996.
Analysts projected a 1.6 per cent reduction from 1.625 million last year.
“This report is sharply neutral with no surprises in any of the categories,” said Allendale Inc. chief strategist Rich Nelson.
Of interest, however, is the 17 per cent year-over-year drop in placements of feeder cattle under 600 lbs. and 2.7 per cent bump in those over 800 lbs., said analysts.
Don Roose, an analyst with U.S. Commodities, said feeder cattle outside of feedlots remain historically large. That, he said may cap potential slaughter cattle price rallies, as suggested by the light-weight category, heading into the summer months.
With respect to CME live cattle futures on Monday, analysts said the report will “take a back seat” to late Friday’s prices for wholesale beef and market-ready, or cash, cattle.
— Theopolis Waters reports on livestock markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago.