In the Cattle Markets
Fed-heifer marketings surge during the last six weeks.
Cattle slaughter surged during the last six weeks, with weekly slaughter more than 650,000 head every week since the first of May, except the Memorial Day shortened week. Total cattle slaughter is up about 9% compared to the same period a year ago. Much of the year-over-year increase in slaughter is from heifers.
Fed-heifer slaughter is up about 17% during the last six weeks, using the daily slaughter data and estimating the first two weeks of June. Going back to the first of April, fed-heifer slaughter is up about 16% compared to a year ago.Weekly slaughter levels were the highest since May 2013.
Steer, heifer, beef cow and dairy cow slaughter tend to have their own different seasonal patterns. These depend, in large part, on seasonal production patterns. Beef cow culling tends to climb in late spring to early summer and then peak in fall. Culling of dairy cows bottoms out in summer. Looking at the last few years, heifer slaughter tended to be at its seasonal low from about May to July at the same time steer slaughter hit its seasonal high.
Summer seasonal lows in heifer slaughter during the last few years reflect cow herd expansion. Fewer heifer calves were sent to feedlots as they were kept to enter the herd. The seasonality of heifer slaughter is likely changing as the herd size has recovered from the drought, and expansion is slowing. More heifer calves and feeders are available to go to feedlots because more were born and fewer are needed for herd replacement.
The Cattle on Feed report each quarter includes a breakout estimate of the number of steers and heifers on feed. The April Cattle on Feed report indicated there were 14% more heifers on feed than the year before. That estimate is not far off the growth in heifer slaughter year over year in the April to early June period. While the number of heifers on feed has been very large compared to the last few years, it is about the same as the number on feed, on average, during the 2007-2012 period before the drought and during the herd adjustments to ethanol-fueled feed costs. The July Cattle on Feed report will provide the next estimate of the number of heifers in feedlots.
In the face of surging heifer and all cattle slaughter, fed-cattle prices rebounded last week, up from about $110 to $114 per hundredweight. Exports continue to boom while some market refueling from the Memorial Day holiday weekend is moving beef in the domestic market.
Editor’s Note: David Anderson is professor and extension economist for the Department of Agricultural Economics at Texas A&M University and a regular contributor to the Livestock Marketing Information Center (http://lmic.info), for which this article was originally written.