Cow/calf producers typically focus most of their marketing efforts on calves, but there are opportunities for profitable sales of the older members of the herd, said Mark Johnson, Oklahoma State University Extension beef cattle breeding specialist, in a letter called Cow-Calf Corner.
Little marketing effort is put into cull cows and bulls, Johnson said. While pregnancy and culling rates vary between operations; over time, the sale of cull breeding stock accounts for roughly 20% of gross revenue in a cow/calf production system.
The ebb and flow of the cull cow market has proven to be extremely consistent (and predictable) over time, he said.
SEASONAL PATTERN CONSISTENT
The seasonal pattern has been consistent for decades, Johnson said. The 20-year average break from the highs of summer to the low in November is 15%.
Cull prices typically move higher in the early spring before peaking in the summer when strong seasonal grilling activity drives the demand for ground beef, Johnson said. This demand starts to soften in September and is followed by a large supply of spring calving cull cows hitting the market (after weaning and fall pregnancy checks), in October and November resulting in the fall lows.
While many spring calving operations simply choose to dispose of culls as quickly and easily as possible, there is considerable potential to increase the salvage value of culls by 25% to 45% with some additional effort devoted to marketing and management, he said.
Additional value can be gained through added weight, improving the quality classification and taking advantage of the seasonal price patterns, Johnson said.
THIS YEAR
The summer of 2024 has seen cull cow values reach record highs, he said. A decline in beef cow slaughter numbers reflects the current cowherd stabilization.
Year-to-date, commercial beef cow slaughter is down 16% from 2023, Johnson said. From a demand standpoint, consumer preference for ground beef products has been robust even at current prices.
For fall calving herds, the seasonal pattern suggests the most profitable option is to market cull cows at the time of weaning/culling in the spring, he said. There is little reason to expect anything different next year as the decreasing cowherd, and small supply of designated replacement heifers this past January, supports calls for strong slaughter cow demand in 2025.
For spring calving operations, this fall represents an opportunity to increase the value of cull cows from the fall lows by retaining ownership into the new year.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $186.66 per cwt to $186.97, compared with last week’s range of $180.03 to $188.29 per cwt. FOB dressed steers, and heifers went for $292.69 per cwt to $293.20, compared with $288.63 to $297.87.
The USDA choice cutout Monday was up $3.35 per cwt at $305.93 while select was up $1.72 at $289.33. The choice/select spread widened to $16.60 from $14.97 with 79 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $353.09 per cwt, and 50% beef was $67.64.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.28 to $1.40 a bushel over the Dec corn contract, which settled at $4.27 1/4 a bushel, up $0.01 1/4.
No delivery intentions were posted Monday for the Oct live cattle contract.
The CME Feeder Cattle Index for the seven days ended Friday was $247.48 per cwt, up $0.70. This compares with Monday’s Oct contract settlement of $248.85, down $0.77.