August Slaughter Rising To New Heights

August is on track to have the largest cattle slaughter total so far in 2017 after stellar runs in June and July.

The weekly average federally inspected cattle slaughter by month for the year wouldn’t indicate August to be an unusually large slaughter month without considering that August has nearly five work weeks in it.  With the extra week, August slaughter looks to be on track to be the largest of the year so far.

The estimated average weekly kill for the first two weeks of the month is 637,500 head, according to USDA’s Agricultural Marketing Service.

The month with the next largest weekly average is June with 641,110 head.  Then comes July with 603,790 head per week.

However, the weekly averages so far in August are taking the kill level to recent highs.

Slaughter started moving up from the 2011-2015 average the second week of July and has continued to rise ever since, making last week’s estimated kill rate the largest weekly total of the year.

It appears a summer jump in kill rates associated with seasonal buying interest and cattle availability began a few weeks early.  There is a strong seasonal tendency for weekly cattle slaughter rates to begin a slow decline the week before the Labor Day holiday, although last year, the “decline” was more of a sideways move into the annual peak the week before the Thanksgiving Day holiday.

Weekly slaughter gains this month average about 1.14%.  Extrapolated out, this would mean slaughter this week could be about 648,300 head.




And that’s not all.  Feedlot placement rates earlier this year say slaughter likely will continue to grow.

“Combined March/April placements were 409,000 bigger than last year, said Nevil Speer, vice president of US operations for AgriClear Inc., in an email.  “Even if you spread those out over a couple of months (let’s say eight weeks beginning into August and stretching into October), that’s 50,000 head more per week versus 2016.

“And we did 1.5 million head in 2016 in September,” he added.  “That was the biggest kill since 2011!”

“Can we handle one week?  Sure.  But if we don’t keep that pace up, that’s when we begin to get behind,” Speer said.  “Remember, we had big placements in May and June, too!  They just keep coming!”




There were no sales Wednesday on the livestock exchange video auction.  A week ago, cattle sold at $115.04 per cwt, down $0.96 from $116.00 the previous week.  Cattle with 1- to 9-day delivery sold at $115.28, versus $116 the previous week.  Those with 1- to 17-day delivery sold at $114.50, and cattle with 17- to 30-day delivery sold at $114.00.

Light cash action has been seen in Iowa at $110 per cwt on a live basis and at $114 to $117.50.  A few dressed-basis sales also were reported at $175 to $176.

Cash trading took place last week at $114 to $116 per cwt on a live basis, mostly $115, down about $2 from the previous week.  Dressed action was reported at $184 to $185, down about $2.

The USDA’s choice cutout Wednesday was down $1.44 per cwt at $197.51, while select was off $0.83 at $195.04.  The choice/select spread narrowed to $2.47 from $3.08 with 155 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $144.49 per cwt, down $0.83.  This compares with Wednesday’s Aug settlement at $142.25, down $3.10.