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Northwest Iowa Dairy Outlooks

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

USDA released on Friday its monthly update on cattle on feed supplies and meat protein stocks in cold storage and, overall, the data was supportive of meat prices in the short to medium term.

The cattle on feed survey results were very close to pre-report estimates and will likely be viewed as neutral by futures markets. While the survey indicated that on January 1 total feedlot inventories were 3% higher than a year ago, market participants remain concerned about the prospects of US beef supplies this summer.

As expected, feedlots placed 5.9% fewer cattle on feed than last year and the expectation is that placements will remain light in the next three months due to better feed conditions, including better wheat pastures, and tight feeder supplies. The CME feeder cattle index on Thursday was quoted at $150.39/cwt., a new all time record high. Feedlots also continue to place younger cattle on feed than they did a year ago.

The survey showed that feedlots placed 550,000 head of cattle weighing less than 600 pounds, a 16% increase from year ago levels for this category. Placements of cattle over 600 pounds were down 14% compared to last year. The trend towards placing younger cattle on feed has been going on for some time and it implies much longer marketing windows and tighter market ready supplies than what the headline inventory number implies.


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