Cattle feedlot placements drop
Created: 5/24/12 (Thu) | Topic: Issues
Cattle Feedlot Placements Drop Sharply
Consumers can expect to continue paying relatively high prices for hamburger and steaks, according to USDA’s latest Cattle on Feed report. Placements in feedlots during April of this year were 1.52 million, 15 percent below 2011.
John Anderson, an AFBF livestock economist, said the drop was not unexpected.
“Last year’s drought in the Southern Plains forced a lot of cattlemen to send calves to the feedlot earlier than they would have otherwise,” he explained. “Those early placements in previous months mean that fewer calves are available for shipment to feedlots now. Placements have been below year-ago levels in four of the past five months. This is pulling down the inventory of cattle on feed and helping to support fed cattle prices.”
Anderson says producers are expanding their herds, but it will take a couple of years for that to translate into higher beef production.
USDA also reported that cattle and calves on feed totaled 11.1 million head on May 1, down 1 percent from a year earlier. Beef demand, meanwhile, has remained robust.
“Inflation is still quite strong for meat,” said Richard Volpe, USDA economist, in a USDA radio report. “Despite all the news that meat, especially beef, has been making lately, the meat index, while it was down 0.3 percent on average from March to April, beef and veal was up 0.3 percent. So that right there is an indication that all the current controversy over lean finely textured beef has not yet had a direct effect on retail beef prices.”
In fact, Volpe said, ground beef prices ticked up 0.1 percent over the last month and are 6 percent higher than a year ago.