The USDA will release the monthly Cattle of Feed report on December 23, 2016 for feedlots with greater than 1000 head capacity. We expect the report will show:
The Beginning of December Cattle on Feed Inventory is forecast to be 10,735 thousand head, 99.4% of a year earlier. This is showing a less than usual expansion relative to the prior month.
Cattle Placed on feed during November are expected to be above the year earlier, we estimate animals placed at 1,900,000 head, 118.6% of a year earlier.
Cattle Marketed during November are estimated to be 1,770,000 head, 115.5% of last year. This year, November had one more non-holiday working week days than last year.
Other Disappearance is estimated to be 60,000 head, 75.9 % of a year earlier.
We are very impressed how fast Mexico has been expanding their Cattle Feedlot sector. Historically during the fall months, Mexico has seasonally expanded their shipments of light weight Stocker and Feeder Cattle into the U.S. market usually peaking during the months of November or December. Mexico now is retaining a larger proportion of their Stocker and Feeder Cattle for their own expanding Beef Feedlot capacity/Fed Beef sector.
Starting during May 2016, Mexico sharply restricted exporting Stocker/Feeder Cattle into the U.S. Market as the Mexican Fed Beef Sector expands their feedlot operations. Mexico also expanded their fed cattle slaughter and Boxed Beef production to match their expanding feedlot capacity. As a result, Mexico now is increasing their Beef exports into the U.S. market. We expect that many of the very light weight Mexican Stockers and Feeder Cattle that when into backgrounding programs with native grasses and winter wheat grazing programs before being placed into feedlots to be finished. Many of the Mexican cattle have “short hair” and “thin hides” and do not tolerate winter weather conditions in the Upper Midwestern states feedlots. Fewer Mexican Stocker and Feeder Cattle being exported into the U.S. market are expected to impact Southern and South-Western Feedlots Inventories more than the Upper Midwestern Feedlots.