USDA's National Agricultural Statistics Service released the Cattle on Feed Report Friday afternoon. The numbers were all down from a year ago. Marketings of fed cattle in August totaled 1.88 million head, which is 91% of 2007 numbers and the lowest August marketing number in 12 years.
The total number of cattle on feed as of Sept. 1 was 10 million head, 3% below last year and slightly below expectations. The big surprise was the number of placements of cattle in feedlots during August. Expectations were for placements to be nearly 4% higher because of lower corn prices and the large number of cattle that had been kept on pasture earlier this year. Instead the number of placements was down 3% from 2007 at 2.06 million head.
USDA livestock analyst Shayle Shagam says the smaller inventory of animals out there will work its way through the system in 2009, resulting in steer prices in the upper $90 a hundredweight range for the next 15 months and a drop in overall beef production.
"Probably a decline of about 3% in production the fourth quarter of this year," Shagam says. "And then probably about a half a percent decline in production for all of 2009."
That spells higher retail prices for consumers, possibly an increase of more than 7% next year.
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