In the Cattle Markets
The cull cow market is looking up.
Cull cow prices continued their slow increase into September. Prices in the Southern Plains reached their high of the year, so far, at $54.36 at the end of August. That was 12.5% higher than a year ago. There is good reason to think prices may continue to be above a year ago.
Cow slaughter, largely driven by dairy cow slaughter, hit some multi-decade highs in the first few months of the year. After the surge early in the year, dairy cow slaughter has fallen back to year-ago levels. During the last month, dairy cow slaughter has been almost 1% below a year ago. For the last two months, only 900 head more have gone to market compared to last year. Normally, dairy cow marketings tend to move higher seasonally after July and that is happening this year, as well.
Not only has slaughter fallen below a year ago, but weights of those culled cows have been below a year ago.
Beef cow culling has lagged behind a year ago during the last two months. Beef cow slaughter over this time period is almost 1% below last year. Beef cow culling typically hits its seasonal peak for the year in the fall. It is likely that some earlier culling this year may have pulled some cows ahead into slaughter. Growing dry conditions in the Southern Plains have likely not added to culling numbers yet.
Total cow slaughter is almost half a percent below a year ago over the last two months. As the cow slaughter has declined, cow prices have creeped above a year ago. Cow prices broke sharply lower in the Southern Plains in July 2018. Prices fell even lower as culling ramped up in October. The heavy culling during the first half of 2019 may act to reduce potential numbers going to market in the fall, especially in the dairy side of the industry.
Another factor in higher cow prices and higher cow-beef cutout values is cow weights. Not only has slaughter fallen below a year ago, but weights of those culled cows have been below a year ago. Cow dressed weights have averaged 7.6 pounds (lb.) less in 2019 than in 2018, and 5.5 lb. less over the last month. So, not only have fewer gone to market, but they have weighed less, as well. The overall effect has been less cow beef production in recent weeks, supporting the 90% lean fresh beef price, the wholesale cutout value, and the cull cow price.
Editor’s note: David Anderson is a professor and Extension economist for Texas AgriLife Extension.
