Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 1/25/10

USDA's monthly Cattle on Feed report showed more cattle marketed and fewer placed on feed than analysts were expecting, while its Cold Storage report showed less beef, pork and poultry stored than a year ago.

One Wall Street analyst saw the Cattle on Feed report as negative for beef packers, while the Cold Storage Report was seen as positive for the protein sector in general.

Cattle on Feed

Cattle and calves on feed for the slaughter market in the United States in feedlots with capacity of 1,000 or more head totaled 11.0 million head on Jan. 1, 2010, down 2 percent from Jan. 1, 2009, USDA reported.

The inventory included 6.88 million steers and steer calves, down 3 percent from the previous year. This group accounted for 62 percent of the total inventory. Heifers and heifer calves accounted for 4.07 million head, down 1 percent from 2009.

Placements in feedlots during December totaled 1.55 million, 6 percent below 2008. Analysts polled by Dow Jones on average expected placements to be down just 4.3 percent.

During December, there were 430,000 cattle and calves placed on feed weighing less than 600 pounds. There were 420,000 placed at 600-699 pounds, 401,000 placed at 700-799 pounds and 295,000 placed at 800 pounds and greater.

Marketings of fed cattle during December totaled 1.74 million, 4 percent above 2008. Analysts on average expected marketings to rise by just 2.3 percent.

"A smaller number of cattle leads to higher cattle prices, which all else equal is negative for packer margins between now and six months from now," wrote J.P. Morgan analyst Ken Goldman in a note to investors.

Cold Storage

Total red meat supplies in freezers on Dec. 31, 2009, were down 1 percent from the previous month and down 14 percent from last year, according to USDA's monthly Cold Storage report.

Frozen pork supplies were down 2 percent from the previous month and down 15 percent from last year. Stocks of pork bellies were up 30 percent from last month and up 12 percent from last year.

Total frozen poultry supplies on Dec. 31 were down 1 percent from the previous month and down 24 percent from a year ago. Total stocks of chicken were down 4 percent from the previous month and down 18 percent from last year. Total pounds of turkey in freezers were up 7 percent from last month but down 37 percent from Dec. 31, 2008.

"The amount of meat in cold storage was low across the board, which should be an incremental positive for the protein industry," wrote Goldman.

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