Beef cow slaughter is showing no signs of slowing down as the last three weeks surged over 80,000 head. Total beef cow kill is estimated at 3.3 million head so far this year, about 400,000 higher than last year or 12.8%. The drought induced culling is focuses around slaughter region 6 (AR, LA, NM, OK, & TX), which has harvested nearly 1 million head of beef cows.
Through 44 weeks of the year, beef cow slaughter this year is on pace with the drastic reduction seen in 2011. Comparatively, region 6 at the same point that year was at 963 thousand head versus this year’s 927 thousand. Interestingly, in total this year is ahead of 2011 in total beef cows slaughtered: 3.3 million head versus 3.2 million head. With less than 10 weeks to go, it seems this year will show a larger liquidation than those steep declines seen over a decade ago.
One of the more interesting aspects has been the response in cull prices to these enormous volumes. Nationally, cutter cow prices are roughly $20 per cwt over the five year average, and have been over $70 per cwt. Back in 2011 the price of cull cows soared initially too, but quickly fell off towards the end of the year before ending the year on a high note. Subsequent prices in 2012 were much stronger and averaged annually $69.22 compared to 2011’s $62.90 per cwt. This year has averaged $70.77 per cwt. If cull cow values follow a similar pattern to 2011 and 2012, next year the annual average could be knocking on close to $80 per cwt for cull cows nationally.
National prices hide some of the nuances happening regionally. Southern Plains auction prices for 85-90% lean cows have fallen considerably and are more similar to last year, and under $55 per cwt. In 2011, this price series averaged $66.62—above the national average, and by 2012 soared over $10 per cwt to a $79.43 annual average, a 20% increase. This year Southern Plains lean cows are well below the national average at $63.57 per cwt. A 20% increase next year would mean the Southern Plains would average somewhere close to $76 per cwt.
Daily Livestock Report - Steiner Consulting Group