Cow and heifer slaughter rates this year have been up, possibly giving even stronger support to the idea that the cattle cycle has peaked and is on the way down, a market analyst said.
Data and anecdotal evidence show that cattle producers have been struggling, so a downturn in the number of cattle in the US herd would be a logical inference, the analyst said.
BY THE NUMBERS
Year-to-date federally inspected slaughter numbers for beef cows and heifers are up significantly this year. Heifer kills, at 6.632 million, are up 453,000, or 7.33%, from 6.179 million last year and up 1.020 million, or 18.2%, from the 2013-2017 average of 5.612 million.
A graph of federally inspected weekly heifer slaughter from the Livestock Marketing Information Center shows that weekly heifer slaughter this year has been above the same week last year in all but two weeks this year. There wasn’t even a blip on the chart from the fire at Tyson’s Holcomb, KS, beef plant in early August.
Going forward, if the trend of killing more heifers than last year continues, heifer slaughter will move unevenly sideways or even gain a little until the last two weeks of the year when holidays cut total kill rates sharply.
Total federally inspected cow slaughter so far this year comes to 4.338 million head, up 112,000, or 2.65%, from 4.226 million a year ago and up 507,000, or 13.2%, from the previous five-year average of 3.831 million.
The LMIC reported that heifer slaughter the last week of August surged to more than 200,000 head, up 11% and the highest weekly rate since June 2011, and actual heifer slaughter has been more than a year ago by more than 5%.
Weekly cow slaughter this year has run closer to last year than heifer slaughter. The LMIC graph shows a surge in cow slaughter in late winter and through the spring, but since then, the trends have lain on top of each other.
Going forward, if the total cow kill keeps up with last year, there will be a general rise in numbers until mid-November and then a leveling until the year-end holidays.
WHY?
The LMIC pointed to lower slaughter weights and said those extra heifers likely were those that didn’t get bred.
The July Cattle on Feed report indicated that animals weighing 900 pounds or more that were placed on feed jumped by 11.5% from a year earlier.
“The US does not break down each weight group by heifers and steers, but the large volume in the slaughter mix coupled with higher heavier placement weights could imply that some of those heavier cattle were female replacements that remain open,” the LMIC said.
If high volumes of females continue to enter the slaughter mix, the number of beef cows on Jan. 1 could total less than on Jan. 1 this year.
CATTLE, BEEF RECAP
Cash cattle trade was reported in the Plains Thursday at $165 per cwt on a dressed basis, steady to up $5 from last week.
Cash cattle trade was reported last week at $100 to $104 per cwt on a live basis, up $1 from the previous week.
The USDA choice cutout Thursday was down $1.12 per cwt at $213.51, while select was up $0.56 at $190.39. The choice/select spread narrowed to $23.12 from $24.80 with 112 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $141.13 per cwt, up $1.10 from the previous day. This compares with Thursday’s Sep contract settlement of $141.50, down $0.07, and the Oct settlement of $143.10, up $0.65.