It looks like herd rebuilding may have begun. It could be cut off by resurging drought, but for now, rebuilding the US cattle herd looks promising.
Total weekly cow slaughter is down, although weekly heifer kills remain elevated from the 2018-2022 average.
As of Jan. 1, the USDA reported the US had 87.2 million cattle and calves on farms, a 2% decline from a year earlier and the lowest total inventory since 1951. It was the fifth straight year of declining cattle numbers with a decrease of 8.1% since 2019.
COW SLAUGHTER DEPRESSED
Total cow slaughter is down, which could be the leading edge of the build-up to a larger US cattle herd. If cow/calf operators were to begin rebuilding, slowing the cull rate of the cows they already have would be more economical than the investment necessary to retain heifers to build the cow herd.
Total cow slaughter the second week of May was 102,750 head, according to USDA data compiled and published by the Livestock Marketing Information Center in Denver. This was the smallest weekly total this year and down 1,663, or 1.59%, from 104,413 a week earlier. It also was down 22,050, or 17.7%, from 124,800 a month earlier and down 18,700, or 15.4%, from the previous five-year average of 121,450 a year earlier.
Beef cow slaughter that same week totaled 54,773 head, down 665, or 1.20%, from 55,438 a week earlier, down 14,027, or 20.4%, from 68,800 a month earlier and down 10,749, or 15.4%, from the 2028-2022 average 65,522.
Dairy cow slaughter has been less than either last year or the previous five-year average all year. For the second week of May, the dairy cow kill totaled 47,977 head, the lowest weekly total for the year and down 998, or 2.04%, from 48,975 a week earlier, down 8,023, or 14.3%, from 56,000 a week earlier and down from the average of 55,021.
However, weekly heifer slaughter rates remain higher than the 2018-2022 average. For the second week of May, heifer slaughter totaled 187,588 head, down 24,060, or 11.4%, from 211,648 a week earlier, down 12,112, or 6.07%, from 199,700 a month earlier but up 2,364, or 1.24%, from the previous five-year average of 189,952.
90% LEAN BEEF PRICES RECORD HIGH
Meanwhile, 90% lean beef prices continue to rise, hitting another record high last week at $350.21 per cwt. This was up $72.08, or 2.59%, from $278.13 per cwt a month earlier and up $94.28, or 36.8%, from the previous five-year average of $255.93.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.21 per cwt to $192.34, compared with last week’s range of $184.00 to $194.17 per cwt. FOB dressed steers, and heifers went for $293.35 per cwt to $299.84, compared with $289.67 to $300.73.
The USDA choice cutout Thursday was up $0.42 per cwt at $314.04 while select was up $0.04 at $302.52. The choice/select spread widened to $11.52 from $11.14 with 117 loads of fabricated product and 20 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $357.40 per cwt, and 50% beef was $87.06.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.38 to $1.50 a bushel over the Jul corn contract, which settled at $4.48 3/4 a bushel, down $0.06 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $249.28 per cwt, up $0.60. This compares with Thursday’s Aug contract settlement of $259.07, down $1.17.