The number of cattle populating feedlots in Canada is declining seasonally but at a faster rate than last year, according to statistics from CanFax, a private market advisory group and compiled by the Livestock Marketing Information Center.
CanFax does not release all of its data to non-members, but it does reveal the total number on feed each month and the number of cattle placed on feed in any given month to the LMIC, which then puts the data in graph form for placement on its Web Site.
The rate of decline almost mirrors the 2013-2017 average, although at a higher level. Last year, the number of cattle in Canadian feedlots began to diverge from the five-year average in June. Monthly totals on feed remained above average for the rest of the year and came into 2019 at a higher level where it has remained.
THE NUMBERS
The number of cattle munching feedlot grain on Aug. 1 totaled 797,955 head, down 102,052, or 11.3%, from 900,007 a month earlier. For comparison, the 2013-2017 average for the same date is 663,397, down 103,743, or 13.5%, from 767,140 a month earlier.
The August 2019 total was up 46,398 or 6.17%, from 751,557 in the same month a year ago and up from the previous five-year average by 134,558, or 20.3%.
If the trend in feedlot inventory continues to follow the seasonal, it will set an annual bottom in the September report. From there, it will rise rapidly through the December report.
A market analyst said there was no reason to think the seasonal pattern would change, although divergence could happen as it did last year in June. Canadian feedlots are locked into a very seasonal climate pattern that dictates what is done in many businesses, including feedlots.
However, it looks like feedlot managers are keeping cattle on feed a little longer than they were to pack on extra pounds of fat and to get the most marbling, or inter-muscular fat deposits, that the animal’s genetics will allow, the analyst said.
PLACEMENTS HOLD NEAR AVERAGE
The reason market analysts can think that cattle are being kept on feed longer than they were over the last several years is that the rate of feedlot placements has not changed much from the average or last year. With placements remaining about average, the only way feedlot numbers can grow is that they are keeping them longer before selling them for slaughter.
The data show that 57,788 head were placed on feed in July, down from 78,065 from June and down 5,895, or 9.26%, from 63,683 a year earlier but up 13,303, or 29.9%, from the previous five-year average of 44,485.
This month’s placements likely will be the low of the year. A steep increase goes until October.
CATTLE, BEEF RECAP
Light cash cattle trade was reported this week at $106.50 per cwt on a live basis in Nebraska, compared with trade in the Plains last week at $105 to $108. Dressed-basis trade last week was at $175, up $3 to $5.
The USDA choice cutout Tuesday was down $1.30 per cwt at $236.76, while select was down $0.95 at $210.71. The choice/select spread narrowed to $26.05 from $26.40 with 83 loads of fabricated product sold into the spot market.
No cattle were tendered for delivery against the Aug contract Tuesday.
The CME Feeder Cattle index for the seven days ended Friday was $138.38 per cwt, up $0.72 from the previous day. This compares with Tuesday’s Aug contract settlement of $138.55, down $0.10, and the Sep contract settlement of $133.77, down $2.22.