nina | February 1st, 2012 - 9:00 am

USDA reported the smallest total cattle and calves inventory on January 1 since 1952 and a calf crop in 2011 that was the smallest since 1950, reflecting even tighter cattle supplies than market analysts were expecting.

In its twice-yearly Cattle report, USDA pegged cattle and calves in the U.S. as of January 1, 2012 at 90.9 million head, 2.1 percent below the 92.7 million a year ago and the lowest Jan. 1 inventory of all cattle and calves since the 88.1 million on hand in 1952.

On an average, analysts were expecting the inventory decline by about 1.7 percent.

Beef cow inventories declined by 3.1 percent, while analysts were expecting a 2.8 percent decline.

With beef packer margins suffering despite larger near-term cattle availability, margins likely will remain under pressure absent capacity reductions as cattle supplies tighten further.  Smaller cattle supply coupled with the increase in cattle on feed indicates cattle supplies should continue to tighten as cattle placements likely will continue to trend below year-ago levels.

Source:  meatingplace, Industry News AM, 1/30/12

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