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Cull cow prices move higher

Article-Cull cow prices move higher

Heavy cow harvest: Is herd liquidation nigh?
CattleFax projects an average price of $55 per cwt for cull cows this year.

Cull cow prices finally gained some traction the past few weeks, but will likely remain under pressure amid growing supplies.

On the one hand, Andrew P. Griffith, agricultural economist at the University of Tennessee, explained in his market comments last week that slaughter cow prices in his state increased about $10 per cwt in the last month, equivalent to $120-$140 per head.

Cull cow supplies remain plentiful, though.

“From record low beef cow culling rates in 2015, beef cow slaughter has risen as herd inventories grew and culling returned to normal rates,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

“In 2018, dairy cow slaughter was higher than expected as a result of dismal dairy market conditions. As a result, 2018 total cow slaughter was 6.2 million head, up 1.0 million head or 20% above the recent low of 5.2 million head in 2015,” Peel says.

“In addition to significantly larger cow beef supplies, there may also be some demand weakness in the processing beef market as ground beef competes with record large pork and poultry supplies.”

“Years of expansion and poor operating margins in the dairy sector are generating more cull cows, which weighs on the markets,” explained CattleFax analyst, Kevin Good, at that organization’s recent Outlook Seminar. “The additional supply and the limited packing capacity for non-fed cattle will result in a market which averages approximately $55 per cwt during 2019, with a spring high near $60 and a fall low in the lower $40s.”

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