Market Intel: Cow Slaughter Higher in Beef and Dairy Herds
Federally inspected cow slaughter is released with regional aggregations weekly and data has been released through the first quarter of 2017. The U.S. is grouped into 10 regions, and the Agriculture Department reports data weekly for beef and dairy cows sent to federally inspected plants. This can be an indicator of changes in the cow herds, such as phases of contraction or expansion and changes to herd turnover rates.
Through the 12 weeks of 2017 cow slaughter has been up, beef cow slaughter is up 9 percent, while dairy cow slaughter is up 4 percent. This is unsurprising on the beef side, as cattle prices have entered into a second year of lower prices. However, the Jan. 1 cattle report confirmed expansion was still in the minds of producers, showing beef cows were up 3 percent from a year ago and beef replacements were 1 percent higher.
There are several factors at play. The first is low prices in the fall encouraged hold back on animals that would have been culled last year. Since then, cull cow prices have moved higher relative to the fall and producers have shipped those animals to take advantage of higher prices. But, more importantly cattle producers are returning to more normal cull rates compared to relatively low cull rates seen in the last couple years of rapid herd expansion. With lower year-over-year prices, 2017 is likely a year of transition, moving away from the expansionary phase seen in the last few years. Because of the timing, it’s premature to start calling for contraction just yet. However, this beef cow slaughter is one to watch over the next several months to clue into next year’s expectations
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