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Cattle placements finally rising

01/23/2013 @ 10:21am

Analysts expect federal data to show a larger number of young replacement cattle were added to U.S. feedlots in December compared with a year ago, breaking a string of six consecutive months of placements below previous-year levels.

The U.S. Department of Agriculture is expected to report Friday about 1.742 million head of young cattle, known as feeders, were added to feedlots last month, according to the average prediction of 10 analysts and traders in a Dow Jones Newswires survey.

If the average of the estimates is correct, the number of cattle added to feedlots would be 4.1% above the same period a year ago and about 4.5% above the five-year average.

The USDA's monthly cattle-on-feed report is scheduled for release Friday at 3 p.m. EST (2000 GMT).

Too little moisture this fall and early winter in the southwest has resulted in poor wheat pastures in the region, forcing more of the young cattle to be moved into the feedyards, analysts said. Meanwhile, feeding margins remain negative due to high corn and hay prices. Poor returns and high feed costs have limited demand for the animals while tight supplies overall have kept feeder cattle prices historically high.

Feedlot margins remained negative in December, representing 20 consecutive months of losses, said Rich Nelson, chief strategist with Allendale Inc. in McHenry, Ill.

During the four-month period from September through December, feedlots with 1,000 head or more capacity placed over 800,000 head fewer feeder cattle, or nearly 10%, compared with a year earlier, said Jim Robb, analyst with the Livestock Marketing Information Center in Denver, Colorado. For all of 2012, Mr. Robb estimates that placements were down about 1.4 million head, or 6%, from 2011.

Analysts estimate the number of cattle on feed as of Jan. 1 at 4.4% below a year ago and smallest for that date since 2010. The average of the estimates was about 11.339 million head, down 1.7% from the five-year average.

The number of cattle marketed, or sent to slaughter, last month was estimated at 6.8% below the same month a year ago and 4.7% below the five-year average. The average of the estimates was about 1.655 million head.

December in 2012 had one less weekday compared with 2011. The Christmas holiday landing on a Tuesday also significantly reduced slaughter schedules on Dec. 24.

The USDA's inventory report for all cattle and calves on the nation's farms and ranches as of Jan. 1 will be released on Feb. 1.


Write to Curt Thacker at curt.thacker@dowjones.com
(END) Dow Jones Newswires
January 23, 2013 08:46 ET (13:46 GMT)
DJ December Cattle Placements Up on Year for 1st Time Since May -Survey->copyright

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