Since January, USDA cattle slaughter data has indicated a 12% decline in beef cow slaughter, said the National Agricultural Statistics Service’s Livestock, Dairy and Poultry Outlook for July.
That likely was a combination of improving pasture conditions, sufficient reductions in animal units per acre on poorer pastures and the prospect of improved profitability from selling calves.
At the same time, dairy cow slaughter was up almost 6% year over year, but not by enough to offset the effect of declining beef cow slaughter on the total, NASS said.
However, beef cow retention likely will cap cow slaughter for the foreseeable future, NASS said.
HEIFER PRICES RISE
In the first six months of 2023, prices for lightweight heifer calves increased at a faster pace than prices for lightweight steer calves, the report said. Concurrently, the six-month cumulative number of heifers sold was up 4% from the same period last year, while total sales were up 6% based on sales receipts reported in the USDA’s, Agricultural Marketing Service National Feeder and Stocker Cattle Summary.
Heifer slaughter as a percent of total steer and heifer slaughter remains above a year ago, as well as above the six-year period of the last herd contractionary period, 2009-2014, NASS said. This seems to be supported by the percent of heifers on feed to the total number of steers and heifers on feed, which, as of April 1, 2023, was 1 percentage point higher than in April 2022 and more than two percentage points lower than the 2009-14 period.
PLACEMENTS COULD BOOST H2 PRODUCTION
The outlook for 2023 beef production was raised marginally from last month by 70 million pounds to 27.2 billion pounds, NASS said. The forecast was only 4% less than the record volume set last year and the fourth largest overall.
That reflects adjustments to the second-quarter forecast based on estimated and actual June slaughter data showing a slower pace of fed cattle slaughter, which offsets higher-than-expected cow slaughter and lower aggregate carcass weights than expected last month.
Despite a faster expected pace of third-quarter cow slaughter, production was lowered on lighter expected average carcass weights and lower steer and heifer slaughter, NASS said. For fourth-quarter 2023, the production outlook was raised from last month as more fed cattle are expected to be marketed based on higher expected year-over-year second-quarter placements.
Based on the latest USDA Cattle on Feed report, feedlot net placements in May were 5% higher year over year at 1.881 million head, the report said. The increase was more than expected, which supported an increase in the forecast for second-quarter 2023 placements, reflecting an expectation of a greater proportion of the feeder cattle outside feedlots to be placed and the earlier placement of some calves.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $178.00 per cwt to $188.83, compared with last week’s range of $178.00 to $186.59 per cwt. FOB dressed steers, and heifers went for $280.35 per cwt to $288.43, compared with $280.56 to $287.07.
The USDA choice cutout Wednesday was down $1.09 per cwt at $303.59 while select was down $0.65 at $275.96. The choice/select spread narrowed to $27.63 from $28.07 with 100 loads of fabricated product and 23 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.90 to $2.05 a bushel over the Sep corn contract, which settled at $5.45 1/2 a bushel, up $0.16 3/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $238.48 per cwt, up $0.03. This compares with Wednesday’s Aug contract settlement of $246.80 per cwt, down $1.20.