Reflecting on the January 1 cattle numbers released  by USDA, analysts with the Livestock Marketing Information Center (LMIC) said last week that further downsizing of the cattle feeding sector is expected in 2012.

“One of the least noticed statistics in the USDA’s January 1 Cattle report is the number of all cattle on feed nationally,” LMIC analysts say. “…Many market watchers have been confused by why the monthly USDA Cattle on Feed reports have shown large year-over-year increases. Even grain market analysts have been puzzled by why more feedstuffs have not been used. As of January 1, 2012, the monthly Cattle on Feed report showed that there were 3% more animals on-feed than a year ago. However, that report only includes feedlots with at least 1,000 head one-time capacity. The number of cattle on-feed in all U.S. feedlots is estimated just twice each year. As of January 1, all feedlots only had 1% more cattle on-feed. So, the unreported monthly feedlots had about 240,000 head less being fed or a decline of nearly 10%. That is an important structural change and reflects smaller operations selling rather than feeding their corn.”

The LMIC folks point out the feeder cattle supply January 1 was 25.8 million head, down 4% (more than 1 million head) from a year earlier. “That statistic will continue to decline in 2012 due to a smaller calf crop and likely significant reductions in the number of Mexican feeder cattle imported by the U.S. Note that U.S. imports of Mexican feeder cattle in 2011 were bolstered by drought in Mexico.”