The latest United States Department of Agriculture cattle on feed report has recorded the fifth consecutive monthly decline when compared to the same time last year, at 9.997 million head as at 1 September 2008.

Meat and Livestock Australia reports that this trend points to a tightening of fed cattle supplies in coming months.

MLA say cattle placements during August in the US also fell on year ago levels, with USDA figures confirming the high cost of feed is pressuring feedlots to place cattle at heavier weights to minimise the time they spend on feed.

The number of cattle placed weighing under 272kgs was 26pc below 2007, while cattle weighing 363kgs or more rose 13pc.

With fed cattle supplies expected to fall, prices should move up in coming months, particularly with US beef exports increasing and beef imports on the decline.

The current price consciousness of US consumers, due to a weak economy, could limit any upward price movement, MLA reports.