US beef imports are liable to remain elevated this year as cow slaughter slips.
The latest USDA World Agricultural Supply and Demand Estimates report Jan. 12 had 2023 beef imports projected to end up at 3.708 million pounds, up 318,000, or 9.38%, from 2022’s 3.390 million.
BEEF COW SLAUGHTER STILL ACTIVE
USDA statistics show beef cow slaughter to be active still as overall herd reduction efforts continue, but the numbers were falling behind last year in January. The Livestock Marketing Information Center in Denver shows beef cow slaughter the second week of January at 68,331 head, down 10,565, or 13.4%, from 78,896 in the same week in 2023 but 2,925, or 4.47%, more than the 2018-2022 average of 65,406.
Beef cow slaughter the first two weeks of January rose seasonally as packing plants came back on line after the year-end holidays and selling interest increased, possibly for tax purposes. Seasonally, beef cow slaughter should show a decrease in the last two weeks of January and into February before bouncing along at a more-or-less steady pace into late spring and early summer.
Cow slaughter should pick up in the summer as pregnancy tests reveal which cows did not get pregnant when bred. The biggest peak will take place through fall as the final annual weaning takes place.
SLAUGHTER COW PRICES ELEVATED
However, even though cow slaughter rates rose in early January, slaughter cow prices were substantially higher than last year or the previous five-year average.
Cow slaughter prices the third week of January were reported by the USDA at $85.73 per cwt, up $31.50, or 58.1%, from $54.21 a year earlier and up $40.34, or 88.9%, from the five-year average of $45.39.
Prices last year tended to rise above the 2018-2022 average beginning in February and remain higher than the average for the rest of the year. The difference between the two even widened as the year progressed since the average doesn’t rise as quickly as the 2023 line and tends to decline after June.
With this year’s slaughter cow prices beginning the year so much higher than either last year or the average and the total US cattle herd continuing to decline, there seems to be little danger of the lines crossing any time soon.
BEEF IMPORTS UP
Monthly US beef and veal imports last year were more than the 2017-2021 average all year except in June and diverged from the 2022 line in May as monthly 2022 imports fell away. The monthly average peaked in July and dropped into December.
As a result, 2023 monthly beef and veal imports remained at levels higher than either 2022 or the average through November, and there is little reason to think December imports will show a large drop to join 2022 or the average.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $172.98 per cwt to $178.85, compared with last week’s range of $171.36 to $176.16 per cwt. FOB dressed steers, and heifers went for $272.94 per cwt to $278.29, compared with $270.35 to $278.11.
The USDA choice cutout Thursday was up $0.40 per cwt at $294.94 while select was down $0.92 at $283.25. The choice/select spread widened to $11.69 from $10.37 with 102 loads of fabricated product and 26 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 $1.35 to $1.49 a bushel over the Mar corn contract, which settled at $4.47 1/4 a bushel, down $0.01.
The CME Feeder Cattle Index for the seven days ended Wednesday was $237.95 per cwt, up $1.63. This compares with Thursday’s Mar contract settlement of $244.87, up $4.72.