USA: In the short term, beef supply may not decline as much as feared

US producers placed 4.3% more cattle on feed in May than they did a year ago. The placement numbers came as a surprise for most in the market. Of the analysts polled ahead of the report, the highest placement number was calling for a 2.6% increase, but the average expected a y/y decline. Why were placements higher despite an ever-shrinking calf crop? And what does this say about herd rebuilding? There is little question that there are fewer cattle out there today than a year or two ago. The cow herd is the smallest it has been in 50 years and simple arithmetic tells you that from a smaller cow herd you will get a smaller calf crop. At the start of the year, the USDA annual cattle survey implied that the feeder supply (i.e., calves and yearlings outside feedlots) was 4.2% lower than a year ago. Placements of feeders into feedlots since the start of the year are down only 2.5%.. In other words, some of the cattle that probably were not expected to go into feedlots are entering ...