According to the USDA’s July Livestock Slaughter report, cattle slaughter totaled 2.4 million head in June, said Hannah Baker, Florida state specialized Extension agent at the University of Florida, in a Livestock Marketing Information Center letter called In The Cattle Markets.
That was a 12% year-over-year decrease and a 7% decline since a month earlier, Baker said. Total cattle slaughter for the first six months of 2024 was 4% less than the total for the first six months of 2023.
BEEF COW SLAUGHTER
Beef cow slaughter for the first half of the year was 15% less than than 2023 and declined by almost 20% since January, she said. Because of the decrease in cow slaughter from limited cattle supplies, 2024 beef production was expected to decrease and by even more in 2025.
However, forecasts for 2024 beef production have increased by 555 million pounds since January because of an increase in number of days on feed and carcass weights of fed cattle, Baker said. The latest 2024 forecast was 26.655 billion pounds, a 1% decline from 2023.
The somewhat steady rate of steer and heifer slaughter combined with longer days on feed and heavier carcass weights are offsetting the decreased cow slaughter and “softening” the beef production decline in 2024, she said. First-half steer and heifer slaughter were roughly 1% lower compared with 2023.
The number of cattle on feed for more than 120 days was 10% larger than 2023 and 5% more than the 2018-2022 average.
Dressed steer carcass weights in June averaged 915 pounds with heifer carcasses averaging 834 pounds, Baker said. During the first half, dressed weights for steer and heifer carcasses averaged 919 pounds and 842 pounds, more than 2-2.5% more than 2023.
TRIMMINGS
Fifty percent lean fed cattle trimmings are combined with 90% lean trimmings from cull cows and bulls, creating ‘80/20’ ground beef, she said. The steady decline of cow slaughter and lean cattle trimmings from non-fed cattle (90s) combined with heavier carcasses from fed cattle (50s) causes disruptions in the ground beef market as the ratio of 90s and 50s becomes imbalanced.
As a result, lean beef wholesale prices are rising to record levels because of the steady demand for ground beef products, Baker said.
Demand for lean beef trimmings has been pushing prices for cull cattle, she said. Prices for 85-90% lean boner cows reached an average national price of $129.11 per cwt in June, a 90% increase from the 2018-2022 national average.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $187.08 per cwt to $193.12, compared with last week’s range of $186.43 to $197.25 per cwt. FOB dressed steers, and heifers went for $294.90 per cwt to $303.53, compared with $295.76 to $308.46.
The USDA choice cutout Tuesday was down $2.05 per cwt at $314.88 while select was down $0.11 at $300.50. The choice/select spread narrowed to $14.38 from $16.32 with 120 loads of fabricated product and nine loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $377.15 per cwt, and 50% beef was $166.31.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.60 a bushel over the Sep corn contract, which settled at $3.81 a bushel, up $0.03 1/4.
No live cattle contracts were tendered for delivery Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $245.32 per cwt, up $0.23. This compares with Wednesday’s Aug contract settlement of $247.90, up $1.42.