Have US cow/calf producers slowed the rate at which they are growing their herds? Or, after boosting heifer and cow retention last year, are they stopping any further expansion efforts for a while?
The answers would appear to be yes and no. They may be slowing their growth rate, but they are not stopping the process of expansion.
A look at year-to-date slaughter rates of various classes of cattle hints that they may be holding cows more and holding heifers less, effectively slowing the rate of herd growth.
Total heifer slaughter was pegged by the USDA last week at 151,385 head, down 2,864, or 1.86%, from 154,249 last year.
So a slaughter rate that began the year well below last year has since come into line and now is only a little weaker. If herd expansion were aggressive, total heifer slaughter might be expected to show a greater divergence downward.
However, beef cow slaughter in the latest week ran below a year ago as the trend so far this year follows the previous 5-year average rather than last year’s more volatile fluctuations. And the trend is in decline, widening the gap between this year and the average.
That suggests cow/calf producers are sending a few more of their heifers to the feedlot than they were and continuing to hoard cows for a few more calves. After years of rigorous culling, these producers may feel they have a time cushion with their younger average cow age before they have to begin culling more heavily again or holding heifers for breeding.
In other words, they can afford to allow their herds to get a little older since previous cullings took out all of the older cows.
CASH CATTLE MARKET QUIET
Cash cattle markets Tuesday remained quiet. Packer buyers were content to stand back and allow futures prices to tumble along with grains after the USDA’s quarterly Stocks and Prospective Plantings reports.
Cash prices last week were higher with trade at $165 per cwt on a live basis, up about $2 from the previous week, and at $262 to $263 on a dressed basis, up about $4.
Corn was the futures leader in Tuesday’s decline as the USDA estimated more ending stocks and more planted acreage than was expected by many traders. The action should have been bullish to feeder cattle, but they moved lower along with live cattle futures.
Feedlot showlists were down in most major feeding areas except Texas, which may give cattle owners a little more negotiating leverage with packer buyers this week, especially when boxed beef prices are figured in.
Boxed beef prices were higher Tuesday with the USDA’s choice cutout rising $2.43 per cwt to $254.13 and select up $1.02 to $248.64. Volume was light, with 87 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Monday was $218.89 per cwt, up $1.16.