Source:  Rita Jane Gabbett, MEATINGPLACE, 6/20/11

USDA on Friday reported that U.S. feedlots placed fewer cattle on feed during May and marketed more cattle than analysts were expecting.

In its monthly Cattle on Feed report, USDA said feedlots placed only 1.810 million head of cattle on feed during May, about 10.8 percent fewer than the same month a year ago and about 3.3 percent fewer than analysts were expecting, according to a pre-report survey by Dow Jones.

Total inventory of cattle on feed as of June 1 was 10.928 million head, 4.1percent higher than a year ago but analysts were expecting a 5.5 percent increase from a year ago. Notably, however, the USDA survey showed fewer cattle on feed than the 11.2 million head reported on May 1.

The report showed cattle marketings in May, at 2 million head, were up 7.3 percent from a year ago and well above pre-report predictions that marketings would increase by just 3.2 percent.

The surge in cattle placements in April was mostly due to cow-calf operators accelerating their marketings due to drought in the Southern Plains and the lack of available feed, according the CME Group’s Daily Livestock Report.

“Placements in June and July will likely be quite restrained as feedlots are finding it increasingly difficult to realize a positive margin,” the DLR predicted. “With the smallest calf crop in over 50 years, feedlots will finding it increasingly difficult to find feeders that have breakevens that are anywhere close to acceptable levels.”

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