The latest USDA Cattle on Feed report was largely neutral for cattle markets, and it pointed to the expected smaller numbers ahead. Colorado State University ag economist Stephen Koontz wrote in his “In the Cattle Markets” column that placements did come in lower than expected.
“The USDA Cattle on Feed Report released on May 19 appears to be rather neutral with continuing evidence of the smaller numbers ahead,” he said. “Focusing on the most important piece of information first, placements were lower than the prior year and were modestly lower than anticipated. Pre-report expectations suggested that placements would be 96.4% of the prior year with a range of 91.8 to 99.6%. Actual placements during the month of April were 95.8% at 1.748 million head.”
Koontz said the market reaction after the report was minimal and nearby instead of in deferred contracts. He said weather is also a factor to watch right now.
Overall, he is expecting a good long-term look for cattle markets.
“It was anticipated that placements through the spring would be more modest than typical,” Koontz said. “Thus, both the intermediate and long-term — or outlook into the fall and winter — remains optimistic.”
Other factors to watch include fed cattle marketings and slaughter numbers.
“Fed cattle marketings have been modestly softer than anticipated,” Koontz said. “…Actual marketings during the month of April was basically inline and 89.9% of the prior year at 1.701 million head. The cattle feeding and meatpacking industries continue to move forward with lighter weekly and monthly marketings and slaughter.”
Koontz said marketing and inventory numbers are bullish.
The inventory of cattle on feed over 150 days was up modestly over the prior month and down over the prior year, on-feed over 120 days is up very modestly, and over 90 days was seasonally up compared to last month but down the most compared to the prior year, he said.
“Marketings were clearly slower, and while the inventories of animals are tighter than the prior year but larger than the prior month, this is only long-term bullish for the market outlook,” Koontz said.