U.S. feedlots purchase 22% more cattle year-over-year in July, beat analyst expectations, as drought in southern part of country forces farmers to remove animals from pasture, USDA says
August 19, 2011
– A U.S. Department of Agriculture report said Aug. 19 that U.S. feedlot purchases were up 22% year-over-year in July to 2.153 million head of cattle as a drought in the southern part of the country made ranchers remove animals from pastures, Bloomberg reported the same day.
A survey of analysts by Bloomberg News predicted a 17% increase on average, but the numbers point to the most purchases since at least July 1996, according to the USDA. As of Aug. 1, the feedlot herd was up 7.6% from last year totaling 10.63 million, beating analyst expectations of a 7.1% increase.
Texas, the largest cattle-producing state, has been enduring a drought that has caused a record US$5.2 billion in crop losses, according to Texas AgriLife Extension Service, a Texas A&M University unit. Over 49% of a land area sprawling a six-state region in the South is seeing an ‘exceptional’ drought, the U.S. Drought Monitor says.
During July, cattle placements exceeded a year ago as the continuing drought on the southern Plans forced cattle out of pastures and into feedlots, and the total on-feed population slightly increased, Vetterkind Cattle Brokerage owner Troy Vetterkind said, Bloomberg reported.
Operators of feedlots purchase year-old animals that weight between 500 pounds and 800 pounds, referred to as feeders. The cattle are fed corn for four or five months to fatten them up to 1,200 pounds, and then sold to meatpackers.
Last month, meatpackers purchased 1.91 million animals from feedlots, a 0.4% growth from last year but the second lowest since at least 1996, the USDA said. On average, analysts projected a 3.4% decline.
The primary source of this article is Bloomberg, New York, New York, on August 19, 2011.