Drought Drives Record Amount of Cattle Into U.S. Feedlots

(Bloomberg) -- Expanding drought conditions in the U.S. are withering grazing pasture and driving cattle into feedlots to fill up on corn.

Placements of cattle into feedlots in September jumped 5.9% from a year ago, bringing the amount of cattle on feed to 11.717 million head as of Oct. 1. That’s the most ever for that month in data that began in 1996, the U.S. Department of Agriculture said in a report Friday. Analysts surveyed by Bloomberg expected placements to rise only 2.5%.

“We are in a bit of a drought,” Paul Defoor, co-chief executive officer at Cactus Feeders in Amarillo, Texas, said by phone. “Cattle would like to be on pasture a little bit longer, but it’s not out there.”

More cattle in feedlots now will result in more animals available to beef packers in the coming months, potentially pressuring prices for each.

December live cattle futures slumped by 4.7% this week in Chicago, the biggest drop in six months.

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