There was little question that the cattle-on-feed inventory would be lower this month, but the degree of decline in placements and inventory was more than many expected.
According to USDA's monthly Cattle on Feed report Friday, there were 11 million head on feed Oct. 1. That’s 3% less than a year earlier. The average guess ahead of the report was a 2% decline.
September placements of 2.0 million head are 19% less than a year earlier. The average pre-report estimate was for a 15% decline. This is the third consecutive month of double-digit declines in placements compared to the previous year.
Marketings in September of 1.6 million head were 12% less than a year earlier. The average estimate ahead of the report was a decline of almost 11%.
There will likely be fewer cattle from south of the border to augment short U.S. supplies, too.
A Closer Look: Rain Could Mean Few Mexican Imports
“The latest trade data for August reveal another reason for tighter feeder cattle supplies,” Derrell Peel, Oklahoma State University Extension livestock marketing specialist, explains in his weekly market comments. “Imports of Mexican cattle through July were running over 30% higher than last year. Mexican cattle imports in August were down over 50% from last year.” Though Peel attributes part of the steep August decline to health restrictions preventing imports from the Mexican state of Chihuahua, he reckons it was 10% less than a typical August.
“The weekly preliminary data for September indicates that Mexican cattle imports will be down even more sharply,” Peel says. “Decreased imports for the remainder of the year may offset the increase in the first seven months of 2012 and hold the annual import total to no more than last year. Mexican cattle imports in 2013 are expected to be sharply lower than in recent years.”