Cow Slaughter Down From a Year Earlier

Dairy cow slaughter was down 10.4% and beef cow slaughter was up 3.6% for same period compared to 2005.

Published on: Mar 14, 2006

Market commentary from Glenn Grimes and Ron Plain, University of Missouri economists

Cow slaughter for the year through the week ending February 18 was down from a year earlier by 3.3%. However, all of the decline was in dairy cows which were down 10.4%. Beef cow slaughter was up 3.6% for this period compared to 2005. One possible reason beef cow slaughter is up is the drought in Texas and Oklahoma. Nearly 23% of the U.S. beef cow herd was in these 2 states at the beginning of 2006.

We still believe the beef cow herd in the U.S. will grow this year unless a severe drought impacts a major portion of the beef cow states.

The drought in Texas and Oklahoma impacted the number of cattle placed on feed during January. Forty-eight percent of the 16% plus increase in placements of cattle on feed weighed less than 600 pounds. The probabilities are high that many of these lightweight cattle came off wheat pastures early due to the dry weather.

The average weighted price of fed cattle live in the 5 market area were $2.77 lower than a week earlier at $85.53 per cwt for the week through Thursday. The average weighted carcass price at $136.55 for the week through Thursday was $5.20 lower than 7 days earlier.

The price of wholesale beef was substantially lower this Friday morning: Choice box beef cutout price at $148.08 per cwt was $1.96 lower than a week earlier. Select beef prices Friday morning at $136.03 per cwt was down $3.57 per cwt from 7 days earlier.

Feeder steer and heifer prices at Oklahoma City this week were steady to $2.00 per cwt lower than last week. Stocker cattle and calves were steady with seven days earlier.

The range in prices by weight groups for medium and large frame No. 1 steers this week were: 400-500 pounds $149.50-157 per cwt, 500-600 pounds $125.50-137 per cwt, 650-700 pounds calves $109.75-114.25 per cwt, 600-700 pounds yearlings $107.25-126 per cwt, 700-800 pounds yearlings $99-115 per cwt, and 800-1000 pounds $91-101.25 per cwt.

The probabilities are quite high that we have had the high in feeder cattle prices for this cycle. However, feeder prices are expected to stay relatively high for the next 2-3 years.

The probabilities are even higher that we have had the high for this cycle in fed cattle prices.

We continue to be amazed at the prices cattle feeders are paying for feeder cattle more red ink appears to be in the future for feeders.

Slaughter this week under Federal Inspection was estimated at 619 thousand head up 3.7% from a year earlier.