U.S. Placed 1.6% More Cattle on Feed in January, USDA Says

U.S. feedlots purchased or placed 1.6 percent more young cattle in January than a year earlier as persistent dry conditions spurred ranchers to move animals off pastures.

About 1.876 million head of cattle were taken in by feedlots last month, up from 1.847 million in January 2012, the U.S. Department of Agriculture said today in a report. Eleven analysts surveyed by Bloomberg News forecast a 0.3 percent increase, on average. The feedlot herd was estimated at 11.073 million as of Feb. 1, down 6.2 percent from a year earlier, which was the decline that analysts had projected.

About 29 percent of the High Plains was in “exceptional” drought as of Feb. 19, a category that the U.S. Drought Monitor says indicates the area had widespread crop and pasture losses and water shortages in reservoirs. A year earlier, less than 0.1 percent got that rating. Dryness probably will persist through the Great Plains from Nebraska to Texas, according to a seasonal outlook released yesterday by the U.S. Climate Prediction Center in College Park, Maryland.

“It’s been pretty dry in the Kansas, Oklahoma, Texas area,” Ron Plain, a livestock economist at the University of Missouri in Columbia, said in a telephone interview before the report. In some areas, cattle aren’t able to graze on winter-wheat fields, so they’re being sold, he said. “The cattle gotta go someplace else.”

Feedlot Sales

Feedlot operators typically 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 1,300 pounds, when they are sold to meatpackers.

Feedlots sold about 1.917 million animals to meatpackers last month, up 5.6 percent from a year earlier, the USDA said. Analysts expected 4.6 percent increase, on average. January 2013 had one more weekday than the previous year.

Fattened-cattle futures for April delivery rose 0.3 percent to settle at $1.28225 a pound at 1 p.m. on the Chicago Mercantile Exchange. The price is down 3.1 percent this year.

Feeder-cattle futures for March settlement gained 0.4 percent to $1.4125 a pound, and the commodity has declined 8.4 percent in 2013.

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