Federally inspected cattle slaughter is rising seasonally but remains below last year and the previous five-year average, implying more beef will be available for the market for the next few weeks.
As calves that were placed into feedlots last fall become ready for slaughter, the slaughter rate goes up, only to peak in late June. The trend will then begin a slow decline into December.
Graphs of cattle slaughter show the interruptions to slaughter associated with holidays, but a close look also shows the June annual high and a dip in mid-summer when high temperatures take their toll on cattle finish.
STEER SLAUGHTER RISE DISPROPORTIONATE, NORMAL
The seasonal rise in total slaughter hangs on a seasonal rise in steer slaughter, which is approximating last year’s rate and running very close to the five-year average.
Steer slaughter last week amounted to 310,187 head, according to the USDA, down 2,013, or 0l64%, from 312,200 a year ago. It also is down 14,413 head, or 4.44%, from the five-year average.
Heifer slaughter continues a vague seasonal decline that likely will end in late June as more are retained for breeding. This seasonality is harder to follow because heifer slaughter tends to remain in a tight range throughout the year and often vacillates from week to week.
The trend this year in heifer slaughter illustrates the desire among ranchers and farmers to rebuild the herd from 63-year lows. Since the first week in March, heifer slaughter has remained below a year ago, which also is below the previous five-year average.
The seasonal bottom for heifer slaughter tends to be the first week in July, although it is not the annual low, which comes the last week of December.
COW SLAUGHTER DIVERGING
Cow slaughter is diverging slightly from the seasonal by continuing to decline rather than bounce in late March. It did the same thing last year but increased into late May when cow slaughter tends to decline again into early July.
Dairy cow slaughter is declining seasonally, and, in fact, is running right with the average and last year.
But beef cow slaughter did not take a seasonal bounce in early April, implying more desire to retain cows for another year (calf) as they rebuild the beef herd. Last year’s cow slaughter also diverged from the average in early April and continued to separate itself from the average for the rest of the year.
CASH CATTLE MARKETS FLAT
Cash cattle markets were quiet Monday as traders assessed their positions in light of new feedlot showlists that overall are smaller than the previous week. Last week, cattle traded at $161 per cwt on a live basis and at $256 to $257 on a dressed basis.
Asking prices were expected at $163 live and about $260 dressed.
Beef prices Monday were mixed, with the USDA choice cutout at $262.92 per cwt, up $0.99, and the select cutout at $250.42, off $0.68.
The CME Feeder Cattle Index for the seven days ended Friday was $219.55 per cwt, down $0.85, compared with the May futures settlement Monday of $218.97.