Chicago/Reuters – The number of cattle placed into U.S. feedlots in June rose three per cent from a year earlier, the government said July 22, below the expectations of most analysts.
Fewer cattle imports from Mexico, along with lackluster prices for cattle ready for slaughter last month, may have slowed the flow of animals into feeding pens more than some had anticipated, said analysts.
They said several months of increased cattle placements resulted in fewer animals moving into feedlots now. And healthy grazing pastures allowed ranchers to fatten cattle longer outside of feedlots.
USDA’s data showed the number of heavier cattle placed in feedlots in June rose 17 per cent from the year-ago month.
Friday’s USDA report showed June placements at 1.525 million head, up three per cent from 1.481 million last year. That was below analysts’ average forecast of 1.576 million.
The USDA put the feedlot cattle supply as of July 1 at 10.356 million head, up one per cent from 10.236 million a year ago. Analysts, on average, had forecast an increase of 1.6 per cent.
The government said the number of cattle sold to packers, or marketings, rose nine per cent in June from a year ago, to 1.912 million head.
Analysts projected a gain of 9.5 per cent from 1.747 million last year.
“There are still young calves or feeder cattle out there in the country, but we’ve made a lot of headway on placing them,” said Livestock Marketing Information Center economist Jessica Sampson.
She said there were about 30,000 fewer head of feeder cattle in June that came into the United States from Mexico.
Linn Group analyst John Ginzel viewed the report as neutral to slightly bullish for Chicago Mercantile Exchange live cattle futures on Monday based on the lighter-than-expected placements.
“Apparently pasture conditions were quite favourable enough to carry cattle on the range,” he said.
Some of the report’s bullish tone may have already been factored in to futures’ strong rally on Friday prior to the data’s release, said analysts.
Friday’s USDA report included the number of heifers on feed as of July 1 at 3.5 million head, up five per cent year from a year ago, which reflects the rate of herd expansion, said analysts.
“The data is supportive of herd expansion slowing down, but not indicating it’s reversing at all,” said Sampson.