August 22, 2011
The USDA has released the August Cattle on Feed Report, which showed huge placements of cattle during the month of July. There were 22.5% more cattle placed on feed this July than a year ago. It is the biggest placements in July since USDA started this data series is 1996.
University of Missouri Ag Economist Ron Plain says a big factor on the number of placements was the drought in the Southern Plains.
"Gosh, 96% of pastures in Texas are rated poor to very poor, 91% in Oklahoma," Plain said. "They are the top two beef cow-calf states and those terrible conditions are forcing a lot of cattle into feedlots."
Surprisingly marketings for the month of July were up from a year ago, with 1.9 million head marketed, up 0.04% from a year ago. This July had one less slaughter day than last July.
"The total number of cattle on feed the first day of August was up 7.6% compared to a year ago," Plain said. "That is the biggest year-over-year increase for any month since October 2006, so it was quite a turnaround from the start of July."
Plain says that a lot of cattle were placed in feedlots this summer that ordinarily would have been sent to feedlots in the fall, so the number of placements in the fourth quarter are likely to be well below year ago levels.
"If we look at it by weight groups, we were up 50% on the number of calves under 600 pounds that were placed in feedlots during the month of July," Plain said. "A very heavy increase in light weight calves. Those calves are going to be on feed for quite a while before they go to slaughter so the total on feed numbers are going to stay high for several more months."
Plain attributes the high number of light weight calves being sent to feedlots to the severe drought conditions.
"Normally light weight calves would stay out on pasture and put on pounds on grass, which is cheaper than the $7 corn we have right now," Plain said. "But because of the very poor pasture condition and very dry weather in a lot of cattle country, it's just not an option to keep those cattle on pasture any longer."
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