Cattle in spring pasture

Cull cow prices jumped in April, bucking the normal seasonal trend.

“Cow prices have been under pressure since last July and at unusually depressed values since last October,” Len Steiner and associates wrote in the Daily Livestock Report. “Last week’s average slaughter cow price in the Southern Plains, as reported by USDA Agriculture Marketing Service, was the highest since last July.

“The contra-seasonal jump in price suggests that this rally could continue for several weeks.”

Beef values from cull cows have continued to climb this year after starting out 2019 in a somewhat depressed state. Steiner and associates said carcass cutout values in the last week have been down a penny or two from a year ago, compared to 12 cents earlier this year.

“Slaughter cow prices at the start of the year were 14 cents per pound lower than at the start of 2018, and in the latest week were 8 cents lower, so these prices are still low relative to the appreciation in the cow beef cutout so far this year,” they said.

The price rally in early March ended abruptly. Steiner and associates suggest this was probably due to a surge in cull beef cows as well as dairy cows, with that figure at the highest it has been in 30 years.

“The peak in cow slaughter may have occurred for the next few months in late March with the confluence of large dairy and beef cow harvests,” they said.

Despite the rally, ups and downs should be expected over the coming weeks and months in this market.

“A normal seasonal ebbing in cow slaughter from now through the late summer provides the framework for a tighter balance between cow beef supplies and consumer demand, thereby supporting stable prices at higher values,” Steiner and associates said. “A 1% decline in milk cows in the dairy herd and milk prices that are at the highest values since 2017 should lead to declining dairy cow slaughter.

“Favorable pasture and range conditions and stable calf prices should moderate the inclination to increase the culling of the beef cow herd until the second half of the year.”

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Jeff DeYoung is livestock editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.