Friday’s Cattle on Feed report was in line with what analysts predicted heading into the report. October placements (2.18 million head) are 13% less than the previous year. Marketings in October (1.84 million head) were 3% more than last year. Total cattle-on-feed inventory (11.3 million head) Nov. 1 is 5% below the same time in 2011.

“Sharply higher feed costs have forced a dramatic reduction in the number of cattle placed on feed,” Len Steiner and Steve Meyer explained in last Wednesday’s CME Group Daily Livestock Report. “Since June, when corn prices started their upward move, feedlots have reduced feedlot cattle placements by almost 1.3 million head compared to the previous year (if we include the average October estimate). Some of this comparison may be skewed a bit by the fact that in 2011 feeders in the Southern Plains were forced to market calves early due to drought pressures and lack of adequate pastures...

“The rapid decline in placements implies a notable reduction in the number of cattle available for marketing by Q2 for 2013, the time when demand for grilling season hits its peak,” they say.