Two trends are very clear, U.S. beef-cattle herds continue to shrink, and cattle feeders are cautiously reluctant to purchase the cattle that are available. The USDA today released its monthly Cattle on Feed report, and its semi-annual Cattle Inventory report. Both show lower numbers just about everywhere.

Feedyard inventories as of July 1 were down 5 percent from a year ago. June placements were 8 percent lower than those during June 2008, and placements were lower in every weight class. Feedyards marketed more cattle than they placed during June, with sales totaling just under 2 million head, a 1 percent increase over last June.

Some analysts expected placements to pick up as feedyard production costs have become a bit more manageable, with corn priced about $2.80 per bushel less than at this time last year. But after sustaining months of losses and seeing little sign of a rally in the fed-cattle market, feedyard buyers have become very cautious. Another factor in the low placement rate is that pasture and range conditions across most of the country have held up well this summer, with notable exceptions in California and the Southern Plains region.

The mid-year Cattle Inventory report repeats one number – 1 percent – throughout. All cattle and calves as of July 1 down 1 percent, beef cows down 1 percent, cows that have calved down 1 percent, calf crop down 1 percent and heifers down 1 percent. One category that departs from the trend is beef replacement heifers, which are down 2 percent, suggesting inventory numbers will continue to shrink for at least a couple more years. Overall the report shows that cow-calf producers on average, while not in drastic liquidation mode, have not yet seen economic signals that would motivate them to expand their herds.

View a detailed breakdown of this month's Cattle on Feed report from CattleNetwork, including month-tomonth comaprisons and data on feedyard occupancy rates.