Tim Petry, Livestock Economist, North Dakota State University Extension Service
USDA – NASS released the November Cattle on Feed report on Friday, November 18. Total numbers from the report with pre-report expectations are summarized below.
Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.9 million head on November 1, 2011. The inventory was 3.7 percent above November 1, 2010, slightly below pre-report estimates. This is the second highest November 1 inventory since the series began in 1996. The number of cattle on feed remained larger than last year due to the severe drought in the Southern Plains. For the past several months, calves in that area have been forced off from grass and into feedlots. Cattle on feed were up 7% in Texas and 16% in Arizona.
Placements into feedlots in October totaled 2.49 million head, just 0.6% below last year. The Southern Plains drought was also evident in the placement weight categories. Placements of calves under 600 pounds were up 11% over last year, while 600-699 lb. placements were down 6.25%, with 700-799 lbs. down 2.7%, and the 800 lb. plus category down 6.4%. Many of the under 600 pound calves would normally be placed on winter wheat that is not available this year due to drought conditions. The decline in placements in the over 600 lb. categories was expected and more in line with the fewer number of feeder cattle that are available. USDA-NASS reported that there were 2.5% fewer calves and feeder cattle outside of feedlots in the July 1 Cattle inventory report. Expectations are that placements will continue to fall below last year in the next several months.
Feedlots marketed cattle aggressively in October with marketings at 3% higher than last year and above pre-report estimates.
The fed cattle market retreated last week from the yearly high in prices recorded the previous week. 5-area fed steers on a live weight basis averaged $122.87 per hundredweight, down $2.62 for the week. Dressed weight prices declined $4.01 for the week to average $196.07. However, the wholesale beef market continued to strengthen with holiday purchases in full swing and lower fed steer and heifer slaughter. Choice boxed beef rallied $4.60 for the week to close at $194.52. The Choice-Select spread lost 73 cents to close the week at $17.77, but was still almost double last year’s $8.96 spread. 700-800 feeder steer prices declined in Montana, Nebraska, and Oklahoma as live cattle futures weakened later in the week. But 500-600lb feeder steers continued to strengthen contra-seasonally. Corn prices in Omaha on Thursday were down 24 cents a bushel at $6.25, but distillers’ grain prices in Nebraska improved over last week.