The first moves toward rebuilding the US cattle herd may have begun as weekly federally inspected cow slaughter is down from a year ago and the 2019-2023 average.
“We’re starting to get rain in western parts of the country,” a feedlot manager said. Producers are starting to retain cows, but not heifers yet.
Market analysts have said all along that the first signs of rebuilding efforts will be seen in a lower cow slaughter. Cuts to heifer slaughter will come later and will show a more definite trend toward rebuilding, they said.
TOTAL COW KILLS DOWN
The Livestock Marketing Information Center compiled the USDA’s National Agricultural Statistics Service slaughter data, which said total federally inspected cow slaughter last week was 103,778 head, down 6.54%, or 7,259 head, from 111,037 in the same week a year ago and down 19.1%, or 24,443, from the previous five-year average of 128,221.
Of that, beef cow slaughter last week totaled 51,347 head, NASS said. This was down 2,299, or 4.29%, from 53,646 head in the same week last year and down 11,208, or 17.9%, from the 2019-2023 average of 62,555 head.
Another 52,431 head were dairy cows, down 4,960, or 8.64%, from 57,391 a year earlier and down 13,235, or 20.2%, from the previous five-year average of 65,666 head.
CHEAPER TO KEEP COWS
For cow/calf producers who are itching to rebuild their herds, it’s cheaper to keep cows that are proven producers than to invest in heifers that may not pan out, the analysts said. After years of selling their older cows, there is less incentive to sell younger, more robust, cows.
And, the investment in turning a heifer into a cow is substantial.
First, there is the “lost opportunity cost,” an analyst said. This is the price the heifer would bring if she were sold to a feedlot.
The CME feeder cattle index from auctions Wednesday was $291.93 per cwt, a substantial amount for, say, a 700-pound animal. It’s “hard to pass up,” the feedlot manager said.
Next comes the cost of feeding and medicating her for another nine months to a year after the decision is made to keep her. Then, there is the cost of feed and medication for her and her calf until the calf is ready to be weaned and sold to a feedlot.
So, if cow/calf producers are about ready to begin retaining heifers, there is another two years, or so, before the first calves from such retentions hit the auctions for sale to the feedlots.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $210.15 per cwt to $213.07, compared with last week’s range of $202.49 to $214.41 per cwt. FOB dressed steers, and heifers went for $329.75 per cwt to $334.79, compared with $319.17 to $337.40.
The USDA choice cutout Thursday was down $1.53 per cwt at $338.37 while select was off $0.99 at $317.84. The choice/select spread narrowed to $20.53 from $21.07 with 107 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $381.63 per cwt, and 50% beef was $124.97.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.20 to $1.32 a bushel over the May corn contract, which settled at $4.57 1/2, down $0.00 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $291.93 per cwt, up $0.66. This compares with Thursday’s Apr contract settlement of $285.40, down $3.47.