Analysts are predicting Friday’s Cattle on Feed report to reveal another drop in year-to-year inventories, however there’s more variance in predicting the number of cattle placed in January.
Predictions from CME Group ahead of the USDA report expect inventories to be four percent lower than the same month a year earlier. If inventories are lower in Friday’s report, it will show a decrease for the 17th consecutive month.
Pre-report CME Group estimates from 12 respondents show a range of 94.8 percent to 99 percent compared to February 2013 levels. A separate forecast from Allendale, Inc. shows total inventories on the low end at 94.9 percent compared to a year earlier.
In last year’s report, the number of cattle and calves on feed for slaughter market in the United States with capacity of 1,000 or more head totaled 11.1 million head on February 1, 2013. Last month’s report showed a year-to-year decline of five percent, totaling 10.6 million head.
There is more discrepancy among pre-report forecasts for the February placement number. CME Group shows a range from 4.3 percent lower to 7.1 percent higher, averaging an increase of 2.8 percent compared to placements in February 2013.
Last month’s report shows placements increased by 1 percent compared to a year earlier, with feedlots placing 1.68 million head in December 2013. Placements from last February’s report showed 1.88 million head in January 2013.
Allendale says feedlot operators have been motivated by higher cattle prices and lower feed costs, but scarce cattle supplies are the reason they’re expecting a year-to-year decline. Allendale expects Friday’s total placements to be 4.3 percent lower than last February’s report.
Both Allendale and CME Group expect Friday’s report to show a drop of more than four percent in marketings of fed cattle.