Big surge in cattle placed on feed reported by USDA
Cattle placements in feedlots in May totaled 2.02 million, up 23 percent from May, 2009, according to USDA’s monthly cattle on feed report, released last Friday. Total head on feed as of June 1, at 10.5 million, was up one percent from last year.
The big surge in placements “implies an increase in cattle availability later in the year,” according to the CME Group’s Daily Livestock Report. Currently, however, “market-ready fed cattle supplies remain tight.” Oklahoma State University Livestock Marketing Specialist Derrell Peel agreed. He noted the jump in cattle placements comes after months of reducing inventories. He predicted continued seasonal pressure on fed cattle prices until Labor Day, with recovery coming in the fourth quarter. He added that just how low summer prices may go will depend on demand. “If beef demand holds near current levels, there is not a lot of pressure for fed prices to drop much further.”
USDA reported that marketings of fed cattle during May totaled 1.87 million, four percent below last May and the lowest for May since monthly reports started in 1996.
– from lma
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