What about the monthly Cattle on Feed report released by the U.S. Department of Agriculture (USDA) last Friday? More than that, what about the wall of cattle supposedly moving through the supply chain, out of feedlots and into the dressed beef trade? Neither of these have materialized because supply and demand have remained in balance.
AUDIO: Profit Matters 7-24-18
The USDA on Friday released its monthly Cattle on Feed report. Upon its release, Radio Oklahoma Ag Network farm director Ron Hays caught up with Oklahoma State University Extension Livestock market economist Dr. Derrell Peel for his analysis of the numbers.
Dr. Peel says the July report fell right in line with average industry pre-report estimates.
June placements were 101.3-percent of one year ago, the largest June placement total since 2006. June feedlot marketings were 100.9-percent of last year, the largest June marketing total since 2011. June 2018 had one less business day compared to 2017. The July 1 on-feed total was 11.282 million head, up 4.3-percent year-over-year.
?We continue to hold that year-over-year advantage, but it?s not going up,? Dr. Peel said. ?In fact, we?ve pulled it down since the early part of the year, when we had about an eight-percent year-over-year Cattle on Feed inventory in the last couple of months. Now, we?re holding at this four, (a) little bit over four-percent year-over-year increase.?
Peel says some of the pre-report estimates of placements were wide-ranging, with some market watchers anticipating a significantly larger number. For those people, Peel says this report?s placements may be a bit of a surprise on the downside. But overall, he believes the market should not react in any negative way and may on balance be a little friendly to this report.
?The numbers are still bigger, but they are beginning to moderate a little bit,? Dr. Peel said. ?So, we?re staying up with this increase in supply – is the way I read that.?
