U.S. feedlots bought 0.5 percent fewer cattle in December compared with a year earlier, the government said, surprising analysts who were expecting an increase.
Feedlots bought 1.664 million head of cattle last month, down from 1.673 million in December 2011, the U.S. Department of Agriculture said today in a report. The average estimate of 12 analysts surveyed by Bloomberg News was a 2.9 percent increase. The feedlot herd totaled 11.193 million as of Jan. 1, 5.6 percent less from a year earlier. Analysts expected the inventory to be down 4.6 percent.
Most analysts predicted an increase in feedlot purchases, as the country’s worst drought since the 1930s dried out pastures in the Great Plains, prompting some ranchers to sell off young animals earlier than usual. About 27 percent of the High Plains region was in “exceptional” drought as of Jan. 22, the U.S. Drought Monitor shows, up from 0.1 percent a year earlier.
Feedlot operators buy year-old animals that weigh 500 pounds (227 kilograms) to 800 pounds, called feeders. The cattle are fattened on corn for about four to five months until they weigh about 1,200 pounds, when they are sold to meatpackers.
Feedlots sold about 1.745 million animals to meatpackers last month, down 1.7 percent from a year earlier, the USDA said. Analysts expected 6.6 percent drop, on average.
Fattened cattle futures for April delivery climbed 0.3 percent to $1.308 a pound at 12:54 p.m. on the Chicago Mercantile Exchange. The price fell 1.5 percent in January through yesterday.
Feeder-cattle futures for March settlement were little changed at $1.47975 a pound, and the commodity lost 4.1 percent this month through yesterday.
To contact the reporter on this story: Elizabeth Campbell in Chicago at email@example.com
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org.