Fed Cattle Supplies Tight and Getting Tighter

WASHINGTON, D.C. – Supplies of feeder calves and fed cattle are tight and may get tighter this winter and into the spring of 2008, according to analysis by American Farm Bureau Federation economists.
calendar icon 26 September 2007
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“We witnessed a none-too-subtle shift in feeder cattle placements from the South Plains to Nebraska, South Dakota and Iowa last fall and winter,”

AFBF Livestock Economist Jim Sartwelle

Cattle and calves on feed in the country’s largest feedyards – those with the capacity to feed 1,000 or more head – totaled 10.3 million head as of Sept. 1. That’s down 6 percent from a year ago, based on the Agriculture Department’s latest report that looked at the nation’s fed cattle inventory as of Sept. 1.

“Looking inside the numbers, it’s clear inventories are down in nearly all the major cattle feeding states from a year ago,” AFBF Livestock Economist Jim Sartwelle said.

Idaho is down 13 percent from the same time in 2006, Colorado is down 11 percent, Kansas is down 10 percent, and Texas and Nebraska are down 7 percent and 6 percent, respectively.

“We witnessed a none-too-subtle shift in feeder cattle placements from the South Plains to Nebraska, South Dakota and Iowa last fall and winter,” Sartwelle said. “This was in response to increased corn prices and the attraction of ample supplies of ethanol co-products (distillers’ grains) in those key corn-growing states to the fed cattle sector.”

However, Sartwelle expressed some caution. “As the year has worn on, some of the advantages in Nebraska, South Dakota and Iowa have fallen prey to cyclically reduced feeder cattle supplies,” he said. That’s because in August, only South Dakota and Arizona saw feeder cattle placements above 2006 levels, with numbers up 23 percent and 20 percent, respectively.

“In addition, although cash corn prices decreased markedly through the summer, the stigma surrounding placing lighter-weight cattle remains,” Sartwelle said. “During August 2007, placements of cattle that weighed between 600 pounds and 799 pounds actually increased relative to 2006, but the drop – by 190,000 head – in cattle weighing less than 600 pounds more than made up for those modest increases. We are unsure how much of this loss is due to projected costs of gain for 500-pound calves and how much is due to there just not being many 500-pound calves available during August.”

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