Female cattle slaughter remains higher than last year and the 2016-2020 average, suggesting US herd liquidation is well underway and continuing, essentially making fed cattle markets long-term bullish, a market analyst said.
While federally inspected heifer and total cow slaughter rates are holding above the other two benchmark lines on Livestock Marketing Information Center graphs, steer kill rates are very near last year and the previous five-year average.
And, the increase in cow slaughter is almost all beef cows, since dairy cow slaughter rates show little change from the average.
HEIFER SLAUGHTER UP
Total federally inspected heifer slaughter last week was listed by the USDA’s National Agricultural Statistics Service and the Agricultural Marketing Service at 206,100 head, up 1,872, or 0.90%, from 207,972 a week earlier, up 22,936, or 12.5%, from 183,164 in the same week last year and up 35,312, or 20.7%, from the 2016-2020 average of 170,788.
Weekly heifer slaughter started the year at 181,656 head, compared with 195,146 in the same week in 2021 but higher than the 2016-2020 average of 162,463. From there, heifer slaughter rose rapidly to its 2022 peak so far of 297,972 two weeks ago. It passed last year’s rate in the first week of February.
It’s very conceivable that weekly heifer slaughter will dip below the 2021 rate this week, but it appears to be on tract to stay above or mimic last year for a few weeks, at least, the analyst said.
COW KILLS UP AND RISING
In addition to weekly heifer slaughter rates being up from last year and the previous five-year average, total cow slaughter also is up. The result is a decline in the present cow herd and a decline in possible herd replacements for the future.
The total federally inspected cow slaughter rate last week was pegged by the USDA at 144,968 head, down 985, or 0.67%, from this year’s peak so far of 145,953 the week before but up 38,799, or 36.5%, from 106,169 head in the same week last year and up 26,902, or 22.8%, from the 2016-2020 average of 118,066.
Of the total cow kill, the USDA reported that 77,761 last week were beef cows, up 1,814, or 2.39%, from 75,947 the previous week, up 31,221, or 67.1%, from 46,540 the same week last year and up 24,166, or 45.1%, from the five-year average of 53,595.
Weekly beef cow slaughter began the year at a higher level than a year earlier and much higher than the 2016-2020 average. It appears to be on track to remain at higher levels than 2021.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $141.63 to $142.01 per cwt, compared with last week’s range of $140.92 to $145.00. FOB dressed steers and heifers went for $221.70 to $224.78 per cwt, versus $221.90 to $225.95.
The USDA choice cutout Tuesday was down $2.27 per cwt at $252.44, while select was down $5.28 at $244.94. The choice/select spread widened to $7.50 from $4.49 with 128 loads of fabricated product and 66 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.35 a bushel over the May futures and for southwest Kansas were steady at $0.15 over May, which settled at $7.53, up $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $154.11 per cwt down $1.26. This compares with Tuesday’s Mar contract settlement of $154.02 per cwt, down $0.57.