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U.S. Fed Cattle Supply At Three-Year High

The U.S. feedlot cattle supply on Dec. 1 was the largest for that date in three years as profitable cattle prices and poor pastures had producers rushing young cattle into feedlots rather than into breeding herds, analysts said Dec. 17.

The U.S. Agriculture Department said there were 11.609 million cattle in feedlots on Dec. 1, up three per cent from a year ago. That is the most for that date since 2007.

Analysts said cattle supplies should decline in coming months and that may prevent sharp declines in the futures.

“It is remarkable that there are fewer of them (cattle) out there, but we keep placing them on feed far faster than a year ago. At some point, you can’t just keep doing that,” said Ron Plain, livestock economist at the University of Missouri.

Chicago Mercantile Exchange cattle futures finished higher for the week, with the actively traded February futures up 0.975 cent on Dec. 17 at 104.500 cents per lb.

The U.S. Agriculture Department reported 1.958 million new cattle were placed in feedlots in November, up 6.2 per cent from a year ago, compared with marketings of 1.774 million. The marketings were up 8.5 per cent.

The placements were larger than expected while the marketings slightly less than expected.

In addition to high and profitable cattle prices, placements also have been high because of poor grazing conditions in Texas. Ranchers had little choice but to put cattle in feedlots, livestock sources said.

The U.S. cattle herd is the smallest in several decades. As a result, the supply of cattle available for feedlots will shrink.

“We should see these placement numbers tail off as we get to next month or the month after,” said Don Roose, analyst with West Des Moines, Iowabased U.S. Commodities Inc.

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