Cull cow prices in the Southern Plains may have passed the annual top, but still have a chance to make good if they decide to follow the five-year average rather than last year.
This year’s top so far for spent cows in the Southern Plains was $53.25 per cwt on a live basis. It was set in the second week of March, the same week as last year’s top of $73.12 per cwt. After last year’s earlier-than-usual price peak, cull cow prices in the Southern Plains fell away for the rest of the year.
Even if Southern Plains cull cow prices do turn counter to last year’s trend, it seems obvious that it would be a substantial reversal of fortunes for them to reach the 2013-2017 average. The average top for those five years occurs about the second week of August at $96.49.
On a graph, the 2013-2017 average price line has a more rounded mid-summer peak. However, after the mid-August peak, prices for cull cows begins to fall off more rapidly.
AVERAGE PRICES TIED TO SEASONALS
Those average prices have a seasonality in them than can be linked to average weekly price trends for area feeder cattle. As such, there is a strong seasonality to them that prices last year went against.
That seasonality can be linked to seasonal patterns for pasture and forage availability. As summer’s heat builds, many cooler-season grasses begin to wither, and the annual weaning season begins. This lasts until late fall when nearly all of the available grassland in the US has gone dormant for the winter.
There are some areas in far southern states where the grass doesn’t go dormant, but these acres are in the minority. Winter wheat pasture also is available in many states for a few more months of grazing, and there are many farmers and ranchers who will feed hay through the winter. This accounts for enough supply removal from the market to prop up prices at that time.
As grasslands wither, calves will be weaned and cows evaluated for their ability to stay in the herd and produce another calf. If they don’t measure up, they are culled from the herd and either sold outright for slaughter or fattened a little in a feedlot before eventually being sold.
COW SLAUGHTER AUGMENTED BY DAIRY
Total cow slaughter was augmented last year by a rising tide of dairy cows coming to market, an analyst said. This trend is continuing this year and has the potential to keep pressure on prices through the year as it did last year.
Also, this increased cow slaughter has the potential to keep cull cow prices below even last year. And unless it changes, there seems to be little chance of prices rising above last year or even hoping to approach the previous five-year average.
CATTLE, BEEF RECAP
Cash cattle trading was reported at a steady $124 per cwt on a live basis.
Dressed-basis sales last week ranged from $200 to $206 per cwt but were mostly $204, down $2 to $3.
The USDA choice cutout Wednesday was up $0.73 per cwt at $229.05, while select was up $0.82 at $219.62. The choice/select spread narrowed to $9.43 from $9.52 with 113 loads of fabricated product sold into the spot market.
There were 30 tenders Wednesday for heifer deliveries against the Apr futures contract and seven for steers.
The CME Feeder Cattle index for the seven days ended Tuesday, was $143.63 per cwt, up $0.13. This compares with Wednesday’s Apr contract settlement of $145.17, down $0.97.