The following are our estimates for the coming Cattle on Feed and Cold Storage reports:
March Placements are expected 12.2% lower than last year at 1.859 million head. This would be the smallest March placement in 3 years. This stops 12 months in a row of higher than last year placements. Cattle feeding margins is the main reason for the decline. Finished cattle in March were seeing a $122 breakeven, still profitable. The concern comes with the April, May, and June finishing where breakevens increase to the $126 – $129 region due to those heavy fall feeder purchases. Of note, we expect a few months of below last year placements ahead. We will be compared against last year’s March – June period that saw 11% – 16% higher placements than last year. March placements supply the July through October slaughter period.
Allendale anticipates a Marketing total in March at 5.0% under last year for a total of 1.818 million. A 3.6% correction lower was made due to the calendar comparison.
Total Cattle on Feed as of April 1 comes to 7.1% over last year at 11.699 million. This is the largest April 1 total in twelve years.