Larger placements earlier in the year were a result of extremely dry conditions in parts of the Southern Plains which forced feeder cattle into feedlots early, drought in Northern Mexico coupled with historically high prices in the U.S. causing more feeder cattle imports from Mexico, and increased placements of dairy calves on feed. However, a smaller calf and increased heifer retention in parts of the Northern Plains finally came to bear with the lower placements.

The reduction in placements was across all weight groups with the under 600 lb. category down 35,000 head, both 600-699 lb. and 700-799 lb. down 55,000 and the 800 lb.+ weight group down 75,000 head. Historically tight feeder cattle supplies will likely result in fewer placements than a year ago for the next several months.

The COF report also showed strong marketings of fed cattle from feedlots in May, which were over 7 percent higher than last month and higher than trade expectations of 3.2 percent higher. Feedlots were aggressive in marketing cattle with the continuing increase in cost of grain and stagnating fed cattle prices in May. That situation has turned around in June, with fed cattle prices sparking several dollars and nearby corn futures declining over a dollar.

Even though fed cattle prices increased contra seasonally the last couple of weeks, there still were over 4 percent more cattle on feed on June 1 than last year. So, summer beef demand including 4th of July sales will be important factors to watch for summer fed cattle prices. end_mark

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Tim Petry is a livestock economist for North Dakota State University Extension Service.