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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

According to the CME, USDA’s monthly Cattle On Feed report, released Friday afternoon, contained no surprisea and is being viewed by the trade as neutral. October placements of 2.491 million head marked the third month in a row that 2011 numbers have virtually matched those of 2010 but this is the first month since June that placements have been close to “normal” as measured by the 2005-2009 average.

July, August and September placements exceeded the 5-year average by 21.5, 6.7 and 5.8%, respectively.

Winter wheat conditions in the southern plains are mixed but likely supported some movement of cattle out of yards in October. Oklahoma and Kansas are relatively good in terms of both emergence and condition but only 56% of Texas wheat has emerged and 44% of Texas wheat acres are rated poor or very poor. “Other disappearance” from feedyards (ie. NOT marketings) in October numbered 93,000 head, 50% more than last year. That marks the highest monthly figure since May 2010 and the highest figure for October since 2003.

Placement weights were back to “normal” for the second month in a row after spending the first 8 months of 2011 below the average of the past 5 years. The October average of 684.4 pounds compares to 712.7 pounds in September (a very normal decline) and 691.5 in October 2010. 32% of October placements weighted under 600 pounds. That figure is still relatively high compared to 29%, 25% and 29% the past three years.

Total cattle on feed continues to move back toward yearago levels. The November 1 year-on-year increase of 3.7% is the smallest such figure for this year. Only one month in 2011 (June) had placements significantly lower than last year but we expect placements to now be consistently lower than year-ago levels for the foreseeable future, narrowing the gap in feedlot inventory numbers. According to USDA, there were 2.6% fewer calves and feeders outside of feedyards back on July 1.

Those actions will impact the next 12-18 months. This year’s drought-driven beef cow liquidation will negatively impact cattle supplies for the 18-24 months after that. Cattle and beef supplies are going to get very tight.

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