Last Friday, Oct 24, was supposed to be the day the USDA released its Oct. 1 numbers for Cattle on Feed. However, as the government shutdown persists, the report is unlikely to be released any time soon, said the Livestock Marketing Information Center on its website.
As a proxy, pre-report estimates for the Cattle on Feed report are available from some sources, and some conclusions can be drawn from them, the LMIC said, even as it cautioned against making hard-and-fast decisions based on the estimates.
ON-FEED NUMBER SEEN DOWN
On average, analysts forecast the on-feed Oct. 1 number as down 1.9%, which would effectively bring inventories to just under 11.38 million head, the LMIC said. Of the analysts surveyed, pre-report estimates fell within a range of down 1.6% to 2.6%, or from 11.3 to 11.4 million head.
Anticipated declines by Oct. 1 were attributable to declines in September marketings and placements — placements more so than marketings, the LMIC said. Forecasted values for placements came in around 1.97 million head, for an average decline of 8.6%; estimates fell within a range of down 11.9% to down 6%.
Marketings of fed cattle for slaughter were estimated to be down 4% on average in September, bringing totals to roughly 1.63 million head, the LMIC said. What makes this estimate so shocking was this September had an extra slaughter day compared with that of last year.
However, analysts were unanimously in agreement that no increase would be sustained as a biproduct of this realization, with top end declines forecast at down 3.1% versus worst case declines down as much as 7%, the LMIC said.
MISSING ON-FEED BREAKDOWN
What makes this month’s report so special, and what a government shutdown significantly complicates, is the release of quarterly estimates on the breakout of steers versus heifers in feedlots, the LMIC said. This is not a value forecasted and published among pre-report estimates.
The last time this value was published was in the July report, which at the time had the contribution of steers-to-heifers at about 1.6 steers to every heifer on feed, the LMIC said. For context, since roughly 2019, this ratio ranged between 1.5 to 1.7 steers per heifer, which is very low compared with the last two decades. Information from this report could have shed some light on whether herd expansion could be on the horizon.
During the last major trough and expansion event from early 2012 to mid-2015, the ratio moved from 1.6 to more than 2.2 steers per heifer, the LMIC said. Recently, minor reductions in heifers on feed have occurred, but uncertainty will remain without this data.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $239.17 per cwt to $249.43, compared with last week’s range of $237.30 to $243.18 per cwt. FOB dressed steers and heifers went for $374.54 per cwt to $378.93, compared with $368.29 to $381.29.
The USDA choice cutout Wednesday was up $1.73 per cwt at $381.38 while select was up $1.79 at $361.79. The choice/select spread narrowed to $19.59 from $19.65 with 105 loads of fabricated product and 31 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $403.75 per cwt, and 50% beef was $160.49.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.95 to $1.10 a bushel over the Dec corn contract, which settled at $4.34, up $0.02.
No new live cattle delivery intentions were tendered Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $356.62 per cwt, down $3.63. This compares with Wednesday’s Oct contract settlement of $347.87, up $3.77, and Nov’s $342.07, up $8.67.