March 26, 2012 USDA Pegs Cattle On Feed Up
USDA released on Friday its latest estimates of the number of cattle on feed as of March 1, 2012. The results from the monthly survey came in very close to pre-report estimates
– Total cattle on feed on March 1 were estimated at 11.677 million head, about 2.6% higher than a year ago. Pre-report estimates were looking for a 2.3% increase in overall inventory but on a net level the USDA survey was only a few thousand head larger than analyst estimates.
– On average analysts expected total placements to be up 2.7% from the previous year. The USDA report pegged total placements in feedlots that had 1000 or more head on feed at 1.714 million head, 2.8% higher than a year ago.
– The number of cattle marketed was estimated at 1.755 million head, 2% lower than a year ago and smaller than pre-report estimates which were looking for a 0.5% decline in marketings. Overall the feedlot inventory showed that we continue to have more cattle on feed but high breakevens on those cattle will continue to make feedlots reluctant in aggressively marketing cattle. April will be critical for feedlots as retailers and foodservice operators get in gear for the start of the grilling season.
It remains to be seen if all the negative stories about LFTB have any lasting impact on ground beef demand. Ground beef accounts for between 40-45% of all beef consumed in the US.
Cattle carcass weights are now record large for this time of year and on Friday USDA pegged cattle carcass weights at 792 pounds, about 23 pounds or 3% higher than a year ago. The year over year increase in cattle weights in part reflects heavier cattle in feedlots but also more steers in the mix compared to last year.
Based on the USDA monthly statistics, February FI US cattle slaughter was 2.515 million head, 2.5% lower than a year ago. And yet, total production for the month at 1.981 billion pounds was down just 0.6% from a year ago.