CHICAGO (Reuters) — The number of cattle placed in U.S. feedlots in September was up 13.5 percent over last year at the same time, topping analysts’ average forecasts and hitting the highest level for the month in six years.
September placements were 2.15 million head, the U.S. Department of Agriculture cattle on feed report said Oct. 20.
One reason for the large placements was that farmers in drought hit states such as the Dakotas and Montana did not have grass and so decided to sell to feedlots. Feedlots in corn-producing states expected a large supply of inexpensive corn and were happy to buy the cattle.
The increased number going into feedlots now will impact the number of fed cattle next spring. That was expected to weigh down cattle futures when trading resumed Oct. 23 and initially prices fell, but the market then bounced back and fed cattle closed higher. Feeder futures closed lower.
At the meat counter, beef and pork should be more affordable going into next spring.
“The good news for the consumer is we’ve got record supplies of beef and pork going into the fourth quarter. And when we get into the spring grilling season, we’re going to have big supplies still,” said U.S. Commodities president Don Roose.
The USDA put the total feedlot cattle supply as of Oct. 1 at 10.813 million head, up 5.4 percent from 10.256 million a year ago. Analysts, on average, forecast a 4.6 percent increase.
The number of cattle sold to packers, or marketings, were up 2.9 percent in September from a year ago to 1.783 million head. Analysts had projected a gain of 2.6 percent from 1.732 million last year.