USDA's August Cattle on Feed Report issued Friday had some surprises. Most notably the number of cattle placed in feedlots. The trade had been expecting an increase of about 6.5% but the actual number of cattle placed on feed in July was up 12.5%. Ron Plain, an agricultural economist at the University of Missouri-Columbia says there were several reasons for the higher placements.
"One we had very light placements in May and June and we probably backed up some feeder cattle that were ready to go into feedlots," Plain said. "The other thing, corn prices have come down some; that also makes it a little bit more attractive to put cattle on feed. So between the two it was a big placement month."
Another point of interest in the report was that marketings came in a little bit lighter than expected. Plain says between the higher number of placements and fewer cattle being marketed the report was kind of bearish.
"We increased the number of cattle on feed relative to trade expectations," Plain said. "We're still down, the trade was expecting the number of cattle on feed August 1 to be down 3.6%, it's actually only down 2.3%."
Friday marked the sixteenth cattle-on-feed report in a row that posted a total monthly inventory that was less than the previous year.