Dr. Derrell Peel Breaks Down USDA's Cattle on Feed ReportMon, 22 Aug 2016 05:19:52 CDT
The latest monthly USDA Cattle on Feed report was released on Friday afternoon- and one of the leading Land Grant Livestock Market Economists in cattle country says the report came in very close to what was being expected based on pre report guesses. Radio Oklahoma Network’s Farm Director Ron Hays caught up with Extension Beef Economist Dr. Derrell Peel to debrief his initial reaction to the numbers in the report- overall, he sees no surprises..
“I’m actually very confident that we’re in better shape and feel more comfortable with the feedlot situation,” Peel said, “because we are more current, we’re sort of leaner and meaner compared to what we were, not only last year especially, but even really the last two or three years."
Dr. Peel summarized the report saying that across the board it was all well anticipated and he felt as though no major surprises came out with the report, noting that marketings were right where they were expected to be - down one percent, and placements slightly higher than the average guess - at up two percent.
Comparing the report to the last three or four, Peel spotted a few trends. He says the industry is continuing year-over-year increases in placements which he says is well-known and will continue to happen for the foreseeable future. He noted that marketing continues to be aggressive, so feedlot inventories are not building very fast.
Looking deeper into the report, Peel says the numbers tell us that feedlots have no interest right now in owning lightweights, citing that the 700-800 lb. category was up indicating that feeder cattle markets are staying current. He also suggests that drought related issues are affecting the Northing Plains in rebuilding numbers, which is lagging behind the Southern Plains currently.
Finally, Peel says that carcass weight data indicates that the predicted seasonal increase for this fall is happening, but numbers show they are already behind year ago levels for steers, heifers and overall cattle carcass weights.
As far as strategies go for each sector, Peel says there really isn’t much that needs to change but recognizes that there is a lot of opportunity currently. For cow/calf producers, he emphasizes managing costs, and stockers he says have opportunities in backgrounding.
Overall, Peel says there is a good balance throughout all sectors of the industry right now.
Click here to view USDA’s Cattle on Feed report.
Listen to Dr. Derrell Peel’s analysis of today’s Cattle on Feed report from USDA, reported by Farm Director Ron Hays by clicking on the LISTEN BAR below.
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