The monthly USDA Cattle on Feed Report will be released Friday at 2 p.m. Ron Plain, an agricultural economist at the University of Missouri-Columbia, forecasts that placements of cattle in feedlots will be slightly higher while marketings will be down. He predicts placements for January will be 103.5% of a year ago.
"If that turns out to be right it will be the first time since July that we placed more than a year earlier," Plain said. "The reason I'm expecting more is it was under placed for a long time so you kind of create a backlog of cattle outside of feedlots that are ready to go in. Also, because it's winter we're short on pasture and alternatives to putting them in feedlots, so I'm looking for a few more to be placed on feed than we had in January '08."
Meanwhile Plain predicts marketings out of feedlots will be down 8.5% from last year. He says half of that is due to the fact that we had one fewer slaughter day in January than a year ago because of an extra weekend day. Even without that slaughter would have been down nearly 5%.
"That reflects a couple of things; one there's fewer cattle on feed so there fewer to market," Plain said. "The other thing is that we are just hanging onto cattle in feedlots a little longer. Marketing weights have been up and we've backed up cattle in feedlots because prices have been disappointing and we've been hoping prices would move higher."
Plain expects the number of cattle on feed on Feb. 1 to be down 5.5%, which he attributes to the fact that fewer calves were born in 2007 so with the calf crop shrinking so the available supply is cutting back.
"The main reason they're down is cattle feedlots have been losing money lately," Plain said. "There's just not a whole lot of excitement or enthusiasm for cattle feeding right now."