Weekly US Cattle Outlook: Cow Slaughter Up

US - Weekly Cattle Outlook, 5th June 2009 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

8 June 2009

2 minute read

North America

Ron Plain

Cow slaughter through the week of May 16 was up two percent from 12 months earlier. Dairy cow slaughter was up 11.9 per cent, but beef cow slaughter was down 5.5 per cent from 12 months earlier. For the four weeks ending May 16, total cow slaughter was down 6.8 per cent from the same period in 2008. Dairy cow slaughter was up 6.0 per cent, but beef cow slaughter was down 11.9 per cent from a year earlier.

The dairy buyout program by the dairy industry and the dismal milk prices relative to costs are the major reasons for the larger dairy cow slaughter. The smaller beef cow slaughter is probably due to the relatively good feeder cattle prices and rain in the southeastern states that were ravaged by drought for the past two years or so.

Feeder cattle prices for mid-May were about $8-9 per cwt lower for 400-500-pound steers and about $9 per cwt lower for 700-800-pound steers at Oklahoma City this year compared to last year.

Unless we can get substantial growth in beef demand, either export or domestic, we believe the beef cow herd will need to be reduced rather then built in the next year.

Wholesale beef prices Friday morning showed Choice beef at $138.53 per cwt, down $6.16 per cwt from a week earlier. Select beef at $133.58 per cwt was down $5.56 per cwt from seven days earlier.

The difference between Select and Choice beef at $4.95 per cwt is wider than most of the spring but still relatively narrow.

The weighted average price for live steers for the five-market area for the week through Thursday at $82.10 per cwt was down $2.41 per cwt from a week earlier. The weighted average negotiated carcass price for the five-market area at $131.63 through Thursday was down $3.59 per cwt from seven days earlier.

Feeder cattle and calf prices at Oklahoma City this week were steady to $2 per cwt lower than two weeks earlier.

The prices for medium- and large-frame Number One steers by weight groups were: 400-450 pounds $118.50-123 per cwt, 550-600 pounds $108.50-110 per cwt, 600-700 pounds $102-109.50 per cwt, 750-800 pounds $96.50-101.75 per cwt, and 800-1,000 pounds $87.25-99.60 per cwt.

Slaughter for the week under Federal Inspection was estimated at 670 thousand head, down 3.2 per cent from a year earlier.