Number of US cattle on feed expands

The latest USDA Cattle on Feed report by the National Agricultural Statistics Service (NASS) indicates a 1% year-on-year increase in the number of cattle and calves in feedlots with a capacity exceeding 1,000 head – bringing the total inventory to 10.8 million head across the United States. Placements into feedlots through January increased 11% year-on-year, reaching to 1.98 million head, whilst marketings of fed cattle during the month totalled 1.75 million head – up 10% year-on-year.

The Daily Livestock Report (vol. 15/no. 38), by Steiner Consulting Group, comments that cattle marketings have been strong compared to last year, with cattle feeders eager to sell, particularly as the futures market looks set to trend lower. US Choice fed steers are currently priced 119.58 US¢/lb live weight (lwt), down from 133.1US¢/lb lwt a year ago. Packers have also been willing to buy, with stronger demand for beef in the domestic market. In the weekly US imported beef market update, commissioned by MLA, the Steiner Consulting Group reported that lower beef prices have provided retailers and foodservice operators with incentives to promote beef more aggressively and this was helping to move larger volumes.

Placements on feed have also been strengthened by the turnaround in profitability for fed steers and heifers sold during January – supported by lower grain prices in the US, having finished 2016 at a 10-year low (USDA feed grain index).

After reaching a six decade low in 2014, the US cattle herd has recorded two consecutive years of growth, outlined in detail in last week’s MLA market news – US beefs up. US beef exports finished 2016 strongly and with supply constraints out of Australia forecast to continue through the majority of 2017, the competition looks set to intensify in some of Australia’s major export markets. Increasing cattle on feed is a good indication the US is well positioned to ramp up production.