Source: Rita Jane Gabbett, MEATINGPLACE, 12/21/15


USDA’s monthly Cattle on Feed report released Friday was seen as bullish for cattle prices for the first six months of 2016, according to analysts.

Most notable in the report was the 11 percent drop in cattle placed on feed during November, compared to the same month a year ago, putting placements at the lowest for November since the series began in 1996.

“Clearly, the disastrous cattle feeding returns on cattle sold in recent months continued to dampen enthusiasm and ability to buy feeder animals and calves to place on-feed,” the analysts wrote in the Daily Livestock Report, published by Steve Meyer & Len Steiner Inc.

Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel agreed.

“The latest Cattle on Feed report was the most bullish in several months and is a reminder that cattle markets, especially with respect to numbers, is nowhere near as bad as recent market prices would suggest,” Peel wrote in the Cow/Calf Corner newsletter. He noted the Dec. 1 feedlot inventory was fractionally lower compared to one year ago. November feedlot placements were down more than expected at 89 percent of year ago levels.

The analysts  also noted four consecutive months of year-over-year declines in cattle placed nationally have occurred and the number of head put on-feed has been below a year ago for nine of 11 months so far this year.

In terms of steer and heifer marketing trends and beef production in 2016, head slaughtered will likely post rather modest year-over-year gains supported by faster marketing rates than in 2015, the DLR analysts predicted.

“Watch for the biggest year-over-year increases in beef production to be in the second half of 2016,” they wrote.

Many cash feeder cattle auctions will be closed the next two weeks and other cash and futures trading will be limited.

“The holiday hiatus may provide a much needed opportunity for cattle markets to break the emotional roller-coaster of market volatility that has wrung out the market this fall,” Peel predicted.

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