Over the last month, steer and heifer slaughter has been ramping up, a seasonal occurrence that could hit an annual high by the end of the month.
Data from the USDA’s Agricultural Marketing Service and the National Agricultural Statistics Service show that weekly steer slaughter began to rise the third week of March, right on schedule when compared with the 2013-2017 average.
Heifer slaughter has been above last year and the previous five-year average all year, except for one week in mid-February when it dipped below 2018. Heifer kill levels have been above the 2013-2018 average for more than a year.
TOTAL CATTLE KILL UP
All of that leads to a higher total cattle slaughter rate, which also began climbing in mid-February and should top out either in late May or late June.
But because of the variations in heifer and cow slaughter over the course of the cattle cycle, many analysts focus more of their attention on steer slaughter, which is up about 9% from mid-March to mid-April.
Texas A&M University Extension Economist David Anderson, writing for the Livestock Marketing Information Center’s In The Cattle Markets, a letter to Extension Agents, said, that almost 30,000-head-per-week increase was relatively close to the increase in steer slaughter seen over the last five years, on average, and last year.
One of the interesting notes in the cattle market over the last year has been the relatively low level of steer slaughter, Anderson said. While the cow herd and the calf crop have continued to grow, steer slaughter over the last 52 weeks was 1.5% below the previous 52 weeks.
So far this year, steer slaughter is about 2.7% below a year ago, he said. Over time, steer slaughter should, roughly match the growth in the calf crop. Unlike heifers, there’s not much else to do with a steer.
DRESSED WEIGHTS FOLLOW SEASONAL PATTERN
Steer dressed weights normally decline until late May to early June, Anderson said. Weights this year have followed the seasonal pattern but have been below last year’s weights until the last couple of weeks.
Weights averaged 857 pounds for the last reported week, about same as last year. The Cattle on Feed report has indicated more cattle on feed than a year ago and extremely large numbers on feed longer than 120 days.
With good weather, it’s likely weights will outpace last year, adding to beef production. The quarterly report indicated fewer steers on feed April 1 than a year ago, but, steer slaughter ramping up seasonally with heavier weights implies growing beef production into the summer.
HEIFER KILL ADDS BEEF
Increases in beef production have come from heifer and cow slaughter, Anderson said. Heifer slaughter was 11% higher than a year ago over the last four weeks, and 9% higher for the year.
Driven by a financial wreck in the dairy industry, dairy cow slaughter has been the highest since the dairy herd buyout of the 1980s, at over 70,000 head a week in March.
CATTLE, BEEF RECAP
Cash cattle trading was reported this week at $120 to $121 per cwt on a live basis, down $3 from last week. Dressed-basis trading was reported at $195 per cwt, down $5.
The USDA choice cutout Thursday was down $0.54 per cwt at $222.47, while select was off $0.41 at $207.08. The choice/select spread narrowed to $15.39 from $15.52 with 117 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $135.83 per cwt, down $0.74. This compares with Thursday’s May contract settlement of $136.25, up $0.47.