The April U.S. Department of Agriculture (USDA) “Cattle on Feed” report revealed that the seasonally rise in fed beef supplies will occur however not at the rate that market traders had anticipated. The supply of beef will tighten further. This report is friendly for the cattle markets and likely the contributing factor to strong close to the cattle futures last Friday.
According to the USDA, on April 1, 2014 10.86 million head of cattle on feed, which is 1% less than the previous year (chart). The inventory included 7.07 million steers, up 2% from 2013. In addition, heifer calves accounted for 3.71 million head, down 6% from last year. The decline in heifers in feedlots suggests cattle producers are still building herds.
March placements in March totaled 1.795 million head, down 5% from 2013. Marketings of fed cattle for March was 1.66 million head, 4% below last year.
Strong beef prices and challenging weather in some key feeding regions has moved cattle to feedlots sooner than expected. Therefore, feedlots once again will be contending for shrinking number of feeder cattle in the nearby future.