Sort & Cull

Texas Cattle Placements Down 23% Compared to Year Ago on Friday's Cattle on Feed Report

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
The following major feeding states all posted year-over-year declines in placements: Idaho by 9%, Oklahoma 19%, and Texas saw the biggest year-over-year drop at 23%. (DTN chart)

There was little room to argue with the fact that Friday's Cattle on Feed report should be viewed as bullish, with fewer cattle on feed, fewer cattle placed, and more cattle marketed in the United States compared to a year ago. However, we all know that traders don't always see eye to eye with the rest of the market's participants.

Thankfully, traders did end up agreeing that Friday's report was indeed bullish and were willing to cautiously support the live cattle contracts through Monday's trade. But one factor that I think may need to be highlighted more is the impact of the cattle import restriction from Mexico and how it affected Friday's Cattle on Feed report.

With pre-report estimates anticipating that placements could have been anywhere from 98.8% to 107.1% compared to a year ago, the truth is no one really knew where placements would land. But upon seeing that placements only totaled 1.642 million head -- down 3% compared to a year ago -- there's no room to argue that the report was anything but bullish. But where the data becomes incredibly interesting is the state-by-state breakdown.

You see, the following states all posted year-over-year increases for their placements: Arizona by 15%, Iowa 4%, Minnesota 4%, Nebraska 6% and South Dakota by 3%. But the following major feeding states all posted year-over-year declines in placements: Idaho down 9%, Oklahoma 19%, and the state that saw the biggest year-over-year drop was Texas by 23%.

And given the continued ban of Mexican cattle imports into the U.S. after a cow tested positive for New World screwworm in late November, logically the data aligns perfectly with what's happening in the market. It's worth highlighting any unusual findings: This isn't something that the market is accustomed to seeing for Texas placements.

Please note that this upcoming Friday, the Cattle Inventory report will be shared, which will be a big-ticket item for the cattle complex.

To see last week's "USDA Jan. 1 Cattle on Feed Report," see https://www.dtnpf.com/…

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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