Chicago | Reuters –– The number of cattle placed in U.S. feedlots in October declined versus last year, a government report showed on Friday, but not by as much as expected, said analysts.
While pricey calves discouraged feedlots from buying them, high-priced slaughter cattle and deteriorating summer pastures drew more livestock into feeding pens, they said.
The U.S. Department of Agriculture report showed October placements at 2.357 million head, down one per cent from 2.378 million a year earlier.
Analysts, on average, had expected a four per cent October placement decrease.
“Placements came in heavier than expected given the tremendous decline in corn prices than earlier in the year following a record crop,” said University of Missouri livestock economist Ron Plain.
Grazing land is less available heading into winter, and last month’s record-high slaughter cattle prices attracted Canadian and Mexican imports, he added.
Rich Nelson said the industry should expect a “huge bulge” in cattle coming to market over the next month based on the report that showed higher placements of heavyweight animals than a year ago.
Nonetheless, tight supplies during the first quarter, the result of years of drought, should keep beef costs and cattle prices at historically high levels at that time, he said.
Friday afternoon, slaughter cattle in parts of the U.S. Plains fetched $172 per hundredweight (cwt), which matched last week’s record high.
In October, retail beef prices were at $6.24 per pound, down two cents from the September record, based on USDA data.
USDA put the feedlot cattle supply as of Nov. 1 at 10.633 million head, a marginal increase from 10.585 million a year earlier and the first month-to-month gain since August 2012 at 10.656 million. Analysts, on average, forecast a decline of 0.2 per cent.
The supply outcome reflected more-than-expected numbers of cattle put into feedlots last month, said analysts.
The government said the number of cattle sold to packers, or marketings, was down eight per cent in October from a year earlier, to 1.685 million head. Analysts projected a drop of seven per cent from 1.827 million last year.
In October, ranchers placed more cattle than expected, and many of them at heavier weight, which traders may view as mildly bearish for Chicago Mercantile Exchange live cattle futures on Monday, analysts said.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.