On June 17, 2011 the USDA released the monthly Cattle-on-Feed Report for feedlots with capacity of over 1,000 head.

I would interpret the report as friendly to bullish for prices. While the on-feed number showed we had 4.1 percent more cattle on feed this June 1 than last June 1, the trade was expecting 5.5 percent more. And on May 1 we were at 7.3 percent more than the previous year on the same date.

Given the cutback in cow herds in both the U.S and Canada over the past several years, we knew at some point placements would have to begin to fall off, it just did not come as soon as I would have thought.

The Report showed placements down 10.8 percent in May relative to May of 2010. The trade on average was expecting placements to be down 7.5 percent.

The other positive was May marketings. May marketings were up 7.3 percent. The trade on average was expecting marketings to be up 3 percent.

There is still a struggle going on passing the higher beef prices along to consumers, as can be seen in the sharp swings in the futures. Given all the factors hitting consumer's pocket books, this question of how much they are willing to pay for the lower per capita availability is yet to be determined.

Exports continue to run strong, which also affects availability in the U.S.