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Analyzing the lower-than-expected placements figure

The placements figure in the latest cattle-on-feed report was well below what analysts were expecting. USDA livestock analyst Shayle Shagam says good forage conditions and price concerns are two possible explanations.

“The continued availability of forage is encouraging some cow calf operators to continue to hold cattle before placing them in feedlots,” Shagam says. “Cattle feeders have been under pressure in terms of their returns and have been obviously trying to push the price of feeder cattle down. And as cow calf operators have seen their returns diminish, they may be a little more resistant to selling the cattle at prices that the feedlots are offering, if they have alternatives.

“One of those alternatives is, obviously, trying to keep the cattle around a little bit longer. Forage is good and it’s possible some of those animals are being kept back.”

Total placements of feeder cattle into feedlots in September were down two percent from a year ago and the lowest total for the month since USDA began collecting the data in 1996. The average pre-report estimate was for a three percent increase in placements.