The semi-annual USDA Cattle (Inventory) report Friday fell short of revealing data telling of herd rebuilding.
The report only hinted at the first whiff of herd rebuilding with heifer numbers being kept for breeding up about 1%. But many in the cattle industry have said for the last few years that herd rebuilding would begin with a decline in cow slaughter.
2025 BEEF COW SLAUGHTER DOWN FROM AVERAGE
The problem is that herd contraction in the US is in its seventh year and seeing a decline in cow slaughter, especially beef cow slaughter, may be difficult, a market analyst said. At some point, cow/calf producers will run out of easily cullable cows, and the subsequent slaughter decline will be organic and not intentional.
If a cow-slaughter decline is because almost all of the older cows have been culled from US herds, then efforts to hold on to a herd’s remaining cows will not result in any discernible decline in total US slaughter, the analyst said.
And, the US cattle herd may have reached that point, he said. If it has, the time for pointing to lower cow slaughter as the harbinger of herd rebuilding may have passed.
The pointer then goes to heifer retention, but this is very expensive, which will make cow/calf producers think twice, or even three times, before holding one or two back, the analyst said.
A case in point could be USDA data for total federally inspected cow slaughter. For the first two weeks of this year, cow slaughter was relatively flat with the first week of the year logged in at 46,078 head, with the second week at 46,155.
That was unremarkable until the data is compared with the first two weeks of last year at 42,573 head and 48,521 head, respectively. It was a definite rebound from the holiday-induced drop of the last two weeks of December.
The 2020-2024 average weekly kill data showed the same rebound with numbers at 64,441 head and 71,346 head, respectively, for the first two weeks of January.
So, the relatively flat pace of cow slaughter this year may be the start of a flatter-than-normal change in weekly cow slaughter numbers, the analyst said. It’s too soon to tell for sure, but the possibility is interesting to ponder.
WATCH FEEDLOT HEIFER POPULATIONS
Since the USDA only conducts a national cattle census twice a year, the first telling data about heifer retention will be quarterly Cattle on Feed reports that indicate comparative populations of steers and heifers on feed, the analyst said.
Apart from that, only anecdotal information will be available. Anecdotal information may give a feeling that something is going on, but any numbers produced will be regional and incomplete.
Still, it’ll be all that’s available until the USDA does its own “official” count.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $237.60 per cwt to $242.02, compared with last week’s range of $233.00 to $240.00 per cwt. FOB dressed steers and heifers went for $369.10 per cwt to $378.85, compared with $365.91 to $371.92.
The USDA choice cutout Wednesday was down $2.69 per cwt at $368.02 while select was down $5.14 at $362.09. The choice/select spread widened to $5.93 from $3.48 with 71 loads of fabricated product and 30 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $416.31 per cwt, and 50% beef was $156.96.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.98 to $1.12 a bushel over the Mar corn contract, which settled at $4.29 1/2, up $0.01.
The CME Feeder Cattle Index for the seven days ended Tuesday was $374.57 per cwt, down $0.44. This compares with Wednesday’s Mar contract settlement of $370.07, up $2.15.