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Lower placements keep cattle-on-feed numbers sliding

Agriculture.com Staff 02/23/2007 @ 1:47pm

U.S. cattle-on-feed numbers continued their months-long decline in the first 31 days of 2007, according to Friday's monthly USDA-NASS Cattle on Feed report.

According to the report, there were 11.7 million head on feed in feedlots with a capacity of 1,000 head or more as of February 1 of this year, three percent fewer than on the same date a year ago.

Overall, fed cattle marketings were up slightly -- 1.84 million head -- rising two percent and four percent from 2006 and 2005 levels, respectively. Other disappearances added up to 97,000 head, 17% higher than in 2006 and a 33% increase from two years ago.

Key to the lower numbers in Friday's report are placements, which totaled 1.69 million head for the month of January, with net placements totaling 1.59 million. This marks a 23% decline from a year ago, is 10% lower than February 1, 2005, numbers, and stands as the second-lowest January placement total since NASS began tracking cattle-on-feed numbers this way in 1996.

Two factors contributed to the continued placements decline, says Don Roose of U.S. Commodities in West Des Moines, Iowa. Harsh winter weather in January in Plains and Midwest states "was not conducive to moving cattle" and made it difficult to empty and reload feedyard pens, he says.

More importantly, Roose adds that high input costs -- primarily for corn -- led producers to hold cattle on alternative feed supplies longer, delaying feedyard entry in an effort to cut overall feed costs.

"The issue, from a placements standpoint, was high-priced grain, so we continued to see the higher input costs slow down placements. That's why our marketing figure was down from estimates also," Roose says. "We did slow up and delay cattle, so we didn't have cattle moving out to the feeders as aggressively as we normally would."

While the downward trend in cattle on feed and placements has lasted about half a year, Roose says the downturn may be ending soon. The cattle that have been "delayed" on feedstocks like wheat pasture will need to be placed.

"We've had high-priced grain, and what that did is stretched things out. We grew feeders in different ways. Those numbers will come into feedlots as we pull them into lots from wheat," Roose says. "I think we're right on the cusp of the trend changing right now."

U.S. cattle-on-feed numbers continued their months-long decline in the first 31 days of 2007, according to Friday's monthly USDA-NASS Cattle on Feed report.

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