January’s Cattle on Feed report was released in February due to the government shutdown, and it contained a surprise or two.
As of Jan. 1, the inventory in feedlots with a capacity of 1,000 head or more was up 1.7 percent from a year ago. Most analysts expected that number to be closer to 2.3 percent.
December placements were down 1.8 percent, while pre-report estimates believed placements would be up 2 percent.
“The reduction in placements is somewhat of a surprise given that the number of feeder cattle sold in the country in December was notably higher than a year ago,” economist Len Steiner and associates wrote in their Daily Livestock Report Feb. 25.
“Also, seasonally placements are higher in December, which likely influenced analyst estimates. Poor feedlot conditions negatively impacted placements during much of November and December and appear to have affected the placement rate.”
This represents the fourth consecutive month of lower placements over year-ago numbers.
Placements during the September-December period were a combined 379,000 head under year ago levels, and this is expected to affect the supply of market-ready cattle that will be available this spring,” Steiner and associates said.
“Futures currently hold a significant spread between April/June and Aug./Oct., a spread that largely reflects the reality of lower placements in the fall and early winter and the likelihood of higher placements this spring against both late summer and fall months.”
With the smaller inventory, large supplies of cattle remain. This could partially be the reason for steady fed cattle prices, Steiner and associates said, despite poor feedlot conditions due to severe weather.
Cold storage inventory on Jan. 1 was up 0.3 percent for beef, pork and poultry, but remains nearly 7 percent higher than the five-year average.
Pork inventory in cold storage was up 3.1 percent from a year ago, with beef stocks up 1.6 percent from a year ago. Chicken and turkey stocks were up just over a half percent, but 12.2 percent above the five-year average.