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Cattle placements down 5%, reflect tight feeder supply

The cattle industry may have the will to expand the feeder cattle herd, but weather is getting in the way.

Oklahoma State University Livestock Marketing Specialist Derrell Peel tells Brownfield he thinks the potential for expansion is there, with one major issue, “The market’s trying to offer call kinds of incentives to expand the herd, and I think the industry is attempting to do that. The indications at this point are that we are retaining heifers, beef cow slaughter is down dramatically this year so far. So everything’s in place to see, potentially, some modest herd expansion. The one negative factor, of course, is that we continue to have a lot of drought in certain regions and the drought in rebuilding in the Southern Plains at this point in time.”

Allendale broker and analyst David Kohli says the numbers look friendly for futures, especially deferred months.

USDA’s latest cattle on feed report reflects the continued tight supply of available feeder cattle.

Placements on feed during April were down 5% on the year at 1.636 million head, with that tight supply of feeders cancelling out the incentive of good profit margins. Most placements, just short of a million head, were on cattle weighing more than 700 pounds: placements of cattle weighing less than 600 pounds were 385,000 head and 600 to 699 pound placements were 255,000 head, while 700 to 799 pound placements were 396,000 head and placements of cattle weighing 800 pounds and heavier were 600,000 head.

Marketings came out at 1.778 million head, 2% less than last year and the lowest for the month since the series of reports began in 1996. The total number of cattle on feed in the U.S. on April 1 was 10.648 million head, 1% lower than a year ago.

Other disappearances were 83,000 head, up 20% on the year.

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