Ag economists continue to watch the trends in cow slaughter and what it could mean for markets. David Anderson, professor and Extension economist for Texas A&M AgriLife Extension, wrote in his “In the Cattle Markets” column for the Livestock Marketing Information Center that the industry continues to see large cattle slaughter numbers. However, prices have still managed to run ahead of the year before.
The beef cow slaughter numbers are at levels not seen in over a decade.
“Over the last three months, beef cow slaughter totaled 818,000 head, the most since the 837,000 during the same period in 2010,” Anderson said. “Total cow slaughter over the same period are the largest since 2013. At that time, the industry was reducing the number of beef cows, due mostly to low prices, and then the drought in Texas and the Southwest hit.”
Looking at the situation regionally, many southern and western states have seen increased cow slaughter and culling due to drought conditions.
“Region 6 includes Texas, New Mexico and Oklahoma,” Anderson said. “Beef cow slaughter in Region 6 over the last three months totaled 204,000, the most since 2011. Slaughter in Region 9, which includes Arizona, California and Nevada, was the most since 2013. Region 10, the Pacific Northwest (Washington, Oregon and Idaho), had their largest beef cow culling in more than a decade.”
Anderson said the drought is a factor, although there is more nuance to the situation and some other factors at play in the numbers.
“While drought is likely driving more culling, expanded cow packing capacity in the region likely skews the data,” he said. “… Cow culling tends to increase seasonally from mid-year through fall, and prices tend to decline.”
Anderson is watching cattle and beef markets and how they respond.
“Fed cattle prices climbed again prior to the 4th of July weekend, above $125 per cwt.,” Anderson said. “The Choice cutout continued its slide of the last couple of weeks but remains almost 50% higher than a year ago. The Choice-Select spread remains large. Widespread rains in much of Texas have supported calf prices in local markets.”