The level of cow and heifer slaughter this year is very rare and indicates the most severe depletion of female cattle inventories in more than three decades, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
BEEF COW SLAUGHTER UP, SLOWING
It’s too early to be sure, but beef cow slaughter may be slowing, Peel said. In Oklahoma auctions, the weekly volume of cull cows was double last year from July through early November before declining the past two weeks.
Weekly beef cow slaughter has been higher year over year for 70 straight weeks, Peel said. In this period, on only four occasions has the increase been less than 3.0%, and the latest weekly USDA data showed beef cow slaughter was up 2.7%, just the second week this year it was up less than 3.0%.
Year to date, beef cow slaughter is up 12.3%. If beef cow slaughter were to decline to equal year-ago levels for the rest of the year, the 2022 total would be up 10.5%, he said. This would be a net annual beef cow herd culling rate of 13.1%, a new record.
HEIFER KILL UNABATED
However, heifer slaughter has not shown any signs of decreasing, Peel said. The Oct. 1 quarterly Cattle on Feed report showed the number of heifers in feedlots was still up 1.7% year over year.
Since that report, weekly heifer slaughter has remained more than 4% higher than last year with the most recent week up 5.8%, although lower October placements may mean fewer heifers entering feedlots as well and reduced heifer slaughter eventually.
For the year to date, heifer slaughter is up 4.9%, he said. By several relative measures, 2022 heifer slaughter is at the highest level since 2003.
If heifer slaughter dropped to be equal to last year for the remainder of the year, 2022 heifer slaughter would be up 4.3%, Peel said. Beef cow and heifer slaughter could drop to year-ago levels, or even lower, but it seems unlikely at this point.
DROUGHT STILL AN ISSUE
With drought continuing, it is not clear what to expect for female cow and heifer slaughter going forward, Peel said. It seems likely that many producers have adjusted herd inventories to be able get through the winter. This might mean that cow culling will slow through the winter. If La Niña persists next spring, more liquidation can be expected next year.
The damage to cattle industry female inventories is already done in 2022, he said. Totals are more than 51% of total cattle slaughter so far this year and are likely to average more than 50% for the year, the highest female slaughter percentage since 1986.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $155.00 to $159.50 per cwt, compared with last week’s range of $150.85 to $156.00. FOB dressed steers, and heifers went for $237.81 to $244.85 per cwt, versus $236.10 to $242.19.
The USDA choice cutout Tuesday day was up $0.21 per cwt at $254.74 while select was down $2.71 at $225.82. The choice/select spread widened to $28.92 from $26.00 with 123 loads of fabricated product and 29 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 $2.05 to $2.20 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.65 3/4, down $0.03.
The CME Feeder Cattle Index for the seven days ended Monday was $178.85 per cwt up $1.66. This compares with Tuesday’s Jan contract settlement of $178.00, up $1.12.