There was a lot of red ink a year ago in feedlots
Cattle purchases by U.S. feedlots may have surged 23% in May from a year earlier, as profits continued for a fourth straight month, analysts said.
Feedlots without risk-management plans made $90 for each steer or heifer sold in May, compared with losses of $55/head in May 2009, said Ron Plain, a livestock economist at the University of Missouri in Columbia. Purchases, or placements, in line with analysts’ estimates would mark a 2.5% increase over the average for the previous five years.
“There was a lot of red ink a year ago, and that just caused placements to be very light,” Plain said. “Now slaughter-steer prices are well above year-ago levels,” encouraging feedlots to expand herds, he said.