CATTLE BEING PLACED ON FEED LIGHTER THAN NORMAL
Most of the cattle now being placed on
U.S. feedlots weigh less than normal and likely will remain on
feed longer, spreading out marketings and supporting cattle
prices through the summer because of reduced beef supply.
    The prospect of so many cattle remaining on feed for a
longer time blunted the market impact of the high placements
reported in the USDA's latest cattle on feed report, livestock
analysts said.
    After the USDA released its report of cattle on feed in
seven states as of March 1, cattle futures on the Chicago
Mercantile Exchange yesterday rose sharply. The trade had
expected deferred contracts to decline on the USDA report of a
15 pct rise in cattle placements in February from a year ago.
    Although the heavy placements were expected, analysts noted
reports that many cattle put on feed were relatively
lightweight and said feedlot operators would feed the lighter
cattle into the autumn, rather than market them during the
summer as would be the case with the heavier cattle normally
placed on feed.
    Although reports of actual cattle weights are difficult to
obtain, industry sources in the West and Southwest acknowledge
that lighter cattle are being put on feedlots in their areas.
    The increase in lighter-weight cattle entering feedlots,
helps explain the jump in feedlot placements last month from
February, 1986.
    University of Missouri Agricultural Economist Glenn Grimes
said, "The probabilities are high that in order to place that
many cattle on feed they (feedlot operators) had to go to
lighter-weight cattle.
    The only statistics available are from some terminal
markets which represent only a small percentage of the total
cattle marketed. But at those markets, steers averaged 708 lbs
in February compared with 718 lbs last year, Grimes said.
    Even if marketing of the lighter cattle is not delayed,
Grimes said, beef supply likely will be reduced.
    If the average weight is down, and there is no price
weakness to delay marketings, the cattle would be marketed at
lighter weights, which could reduce the beef supply as much as
three pct.
    Bruce Ginn, cattle analyst for The Helming Group (formerly
LBAS), said the lighter cattle are being placed on feed mainly
because of two factors: low grain prices and higher live cattle
prices.
    Many farmers like to feed lighter weight cattle and grain
supplies are large, he noted. Also, the higher live cattle
prices have been encouraging early movement of cattle from
wheat pasture onto feedlots, Ginn said.
    Other analysts also noted that cattle are coming off wheat
pasture sooner than normal because of poor pasture conditions.
    Gary Chapmann, a cash livestock trader for Chapmann and
Graham in Sioux City, Iowa said he believed the general trend
is to lighter weight placements but pasture conditions in his
area benefited from a dry, mild winter.
    To the south, however, he said the weather was wetter and
some cattle are coming off pasture weighing 75 to 100 lbs less
than normal after having gained only 75 lbs all winter.
 Reuter
