Cull cow prices continue to struggle despite a strong fed cattle market.
Josh Maples, Extension ag economist with Mississippi State University, says fed cattle prices remain strong even though supplies are large. It’s a different story for the cull cow market.
“Usually one of the more predictable seasonal markets, cull cow sellers have been plagued by low and going-lower prices for most of the year,” Maples writes in his “In the Cattle Markets” column. “Cull cow price data is a little more difficult to disentangle because there is often not as much volume or consistency across markets as there is for feeder cattle — but the trend has certainly been lower cull prices in 2018.”
For example, Maples says average cull cow prices in South Dakota were roughly 12 percent lower for the July-October time frame. In Kentucky, prices are 17 percent lower.
He says larger cow numbers are impacting the cull cow market.
“Beef cow slaughter has been running above year-ago levels for nearly all of 2018,” Maples says. “USDA-AMS reports about a 12 percent increase in the number of cull cows and bulls sold since the beginning of July 2018 when compared to the same period last year.
“Some of this is due to a larger U.S. cow herd leading to there simply being more potential culls. Low margins for dairy producers forcing more dairy cows into the slaughter mix is another factor.”
Cull cow prices tend to dip seasonally over the fourth quarter, he adds.
“Cow slaughter is seasonally higher during the last three months of the year as producers make cull decisions prior to winter,” Maples says. “Combined with winter usually being a slower ground beef demand time of the year, there usually is not much cull market strength until we get closer to spring.”
Low prices could tempt a producer into keeping that cow over the winter and selling her in the spring. Maples says many producers have been holding on to cows as they wait for higher prices.
He says culling is still the most practical approach for most producers, but adds those with low winter feeding costs may at least consider keeping the cow until prices increase.