Reuters / The number of cattle placed in U.S. feedlots in November was down three per cent from a year earlier, the U.S. Agriculture Department said Dec. 20.
The decrease was attributed to sufficient wheat pastures that allowed ranchers to graze cattle and keep them out of feedlots, analysts said.
Ranchers also held back heifers in an effort to rebuild the U.S. cattle herd, analysts said. The herd is the smallest since the early 1950s as years of drought in parts of the country damaged crops and pastures and drove up feed costs.
USDA showed November placements at 1.882 million head, down three per cent from 1.943 million a year earlier. Analysts, on average, expected a 0.4 per cent increase, but estimates ranged from 95.0 to 104.2 per cent of a year ago.
The November placements were the smallest for that period since 2009’s 1.844 million head.
“Placements were down because we have less cattle than we had before, and we have much-improved ability to hold them out on grass in the country,” said Livestock Marketing Information Center director Jim Robb.
The planned retention of heifer calves for breeding played a significant role in the year-over-year placement decline, he said.
The wide range of pre-report estimates for November placements was due in part to some analysts thinking that lower-priced corn drew more cattle into feedyards, said U.S. Commodities analyst Don Roose.
“The report says that the feeder pool is going to continue to be tight and overall supplies will do nothing to derail the fact that total overall beef production is going to be down about six per cent,” he said.
USDA put the feedlot cattle supply as of Dec. 1 at 10.725 million head, down 5.0 per cent from a year earlier of 11.348 million. Analysts polled by Reuters, on average, expected a drop of 4.7 per cent.
The Dec. 1 feedlot cattle supply was the lowest for the month since 10.633 million in 1996.
Ron Plain, a University of Missouri livestock economist, called the report “good news for cattle prices.” He cited the lower placements, slightly more marketings than anticipated and the smaller-than-expected feedlot cattle supply.
“When you’ve got futures as high as they are, it’s tough to be wildly bullish about moving higher. But, certainly nothing in this report is going to discourage anyone from bidding higher come Monday,” he said.