MLA US Cattle Market Review18 December 2012
US - With the United States Department of Agriculture’s (USDA) Cattle on Feed Report due for released on 21 December, CattleFax estimates that placements during November will have declined a further 9 per cent year-on-year – which would be the lowest total since 1981.
Total placements for July through November have been down by 12 per cent on year ago levels, with December placements expected to continue the downwards trend.
Meanwhile, finished cattle supplies are yet to reflect the reduced placements on feed, with the real impact expected to be felt by the second quarter of 2013. The number of cattle carried over in US feedlots in November was reportedly well above a year ago, which will assist finished cattle supplies into early 2013, with cattle marketings for the month expected to be up 1 per cent year-on-year.
The large carryover of cattle has placed pressure on US feedlots operators’ margins in the short term, with supplies anticipated to be abundant in December and January, accentuated by seasonally softer demand. While buyer interest has reportedly by steady for rib and loin cuts, demand for choice middle cuts is likely to decline over the coming weeks. Demand for lower priced items, such as hamburger and roasts are expected to pick up in January.
The USDA’s weekly average cattle slaughter during November was up 1 per cent on year ago levels, at 621,000 head. While much of the central region of the US continues to suffer severe drought, with most cow-calf operations still having difficulty with depleted feed stocks, US cow slaughter declined 3 per cent year-on-year in November.
Following the seasonal increase in beef cow turn-off in October and November, beef cow slaughter is expected decline seasonally through to the end of the year.
Reflective of the strong demand for lean trimmings, cow prices remained well above the same time last year, averaging 114US¢/lb (CME). As lean beef imports are expected to partly offset the fall in domestic production, prices for lean grinding beef is expected to remain robust into 2013.
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