Beef producers probably trimmed feedlot placements last month as soaring corn prices threatened profit, some analysts believe.

Feedlots placements in top U.S. cattle states during October may have dropped 1.5 percent from the 2.47 million head placed in same month in 2009, according to Elaine Johnson, an analyst with CattleHedging.com, LLC.

“Declining profits and prospects for higher feed prices are certainly the primary reasons” for an expected decline in placements, Johnson said. “Another is the tightening supply of available feeder cattle.”

A decrease in placements in October would mark just the second year-over-year decline over the past eight months. For much of this year, placements, an indicator of beef supplies six to eight months in the future, and on-feed numbers trended higher as rising cattle prices fueled beef producers’ profits.

The U.S. Department of Agriculture is scheduled to release its next monthly Cattle on Feed report Friday at 2 p.m. Central time.

Beef industry profit prospects have clouded amid persistently high unemployment and a corn market rally that sent prices to 26-month highs above $5 a bushel. While cattle prices remain high, feedlot margins slipped into the red this fall, according to analysts.

Feedlots lost an average of $3.40 per head on slaughter animals last month after losing $16 per head in September, according to estimates by Erica Rosa, an economist with the Livestock Marketing Information Center. That’s still an improvement from October 2009, when feedlots lost nearly $45 a head.

Slaughter-ready steers on Oct. 21 reached $101.05 per hundred pounds, the highest price since July 2008, and even after receding in recent weeks, prices remain up about 17 percent from year-ago levels, according to USDA data.

Despite recent losses, feedlots were largely profitable this year after losing money for at least the previous two years, analysts said. The outlook for even higher prices next spring may overshadow expensive corn and prompt some feedlot operators to boost placements.

In late trading today, April cattle futures in Chicago were around $107.675 per hundredweight, while June futures were about $104.80. December futures were $100.80.

Those kinds of prices are “offering feedlots some further encouragement,” said Marty Foreman, an analyst with Doane Advisory Services. “While feeding margins are under pressure now, feedlots have been profitable through most of 2010,” Foreman said. “It was a year of recovery which was sorely needed after the industry incurred huge losses in 2008 and 2009.”

Next year “is even more uncertain with corn stocks historically tight and feed costs rising,” he said. “Cattle feeders need more than one good year to recover the earlier losses.”

The total number of cattle on feed, another closely-followed figure tracked by the USDA, is expected to be up 2.3 as of Nov. 1 from 11.13 million head a year earlier, Foreman estimated.

By Bruce Blythe, Business Editor, Vance Publishing