January Cattle Slaughter Dip Not Unusual

Livestock futures were supported Tuesday by thoughts of reduced slaughter this week after news the blizzard raging through the Central Plains and western Corn Belt closed or curtailed operations at several beef and pork plants.  But if traders think slower slaughter rates are unusual, they are mistaken.

This week’s blizzard knocked out some Cargill and Tyson beef and pork slaughter and processing at plants in Iowa and Nebraska, lending support to futures markets Tuesday.  Reuters quoted industry experts who estimated the storm could trim more than 40,000 hogs and roughly 25,000 cattle from the day’s slaughter.

However, an early February decline in cattle slaughter is not so unusual.  USDA figures show a decline in overall cattle slaughter typically happens the last week of January and continues through February.

For the 2010-2014 period, total federally inspected cattle slaughter hit a peak the last week of January at 628,620 head, dropping to 622,200 the following week.  Last year, total slaughter hit a January peak of 581,171 head the third week of January and fell away to 568,939 the following week with further declines through February.




Total steer slaughter has a seasonal tendency to peak the third week of January with the 2010-2014 average coming in at a top of 301,660 head.  Steer slaughter last year also peaked the third week of January at 299,243 head.

Last week’s cattle slaughter was estimated at 567,000 head, which was bested by the prior week’s (the third week of January’s) kill of 569,000.

Weekly steer slaughter does not hit its seasonal peak until about the third week of June.  For the 2010-2014 period, this was 352,100 head.




USDA data show the seasonal tendency for federally inspected weekly heifer slaughter to peak the fourth week of the year with the 2010-2014 average of 185,720 head.  Last year, the early year peak occurred in the same week at 160,883 head.

Typically, this is a short downturn with the annual peak in heifer coming the third week of February.  Last year, this top was 164,275 head, and the previous five-year average is 189,820.

During this period of rebuilding in the US cattle herd, an early year peak in heifer slaughter can be expected as heifers are held at the ranches and farms for breeding.  An early summer peak, as with steers, is not likely and would be counter-seasonal.




Many cattle traders and analysts feel production losses from this week’s blizzard-induced packing plant closures will be made up with Saturday operations.  Such ideas certainly are not without precedent.

Last year, the USDA recorded a mid-January spike in Saturday operations with another, smaller spike in late March, which may be linked more to an influx of beef orders than to the weather.  Most spikes in Saturday kill operations come just prior to a holiday.




Cash markets Tuesday were quiet with no packer bids.  Asking prices were reported at $142 per cwt on a live basis and $216-$220 on a dressed basis.  Cattle traded last week about $4 higher at $138 live and $210 to $212 dressed, up $8 to $10.

The USDA reported higher wholesale beef prices Tuesday, with choice up $1.95 per cwt at $222.47, and select up $1.97 at $217.63.  The choice/select spread narrowed to $4.84 from $4.86 Monday, and there were 97 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $160.25 per cwt, down $0.30. This compares with Mar’s Tuesday settlement of $157.85, up $0.07.