Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Slaughter cow prices bright spot for cattle industry

Stefonlinton/iStock/Getty Images semi truck hauling livestock
Ground beef demand will be key for supporting beef cull cow prices.

No segment of the cattle industry has been spared from the uncertainty and turmoil driven by COVID-19, but the dynamics for the slaughter cow market have been a little different from the live cattle markets, according to Josh Maples, agricultural economist at Mississippi State University. In fact, he said slaughter cow prices have been one of the few bright spots for cattle producers over the past few months.

Slaughter cow prices in the southern Plains averaged $57.84/cwt. over the past six weeks of available data, a 19.5% increase from the same period in 2019.

The cull cow markets are most directly related with ground beef demand, he explained. Since the emergence of COVID-19 in the U.S., retail sales of ground beef have been significant.

In 2019, the split for total federally inspected cow slaughter was about 50/50 between beef and dairy cows, but Maples said the seasonal patterns of beef and dairy cow slaughter are a little different.

“Dairy cow slaughter typically declines from the first of the year to a seasonal low in June/July. Beef cow slaughter varies too, with production cycles and declines in the summer, but is typically a little more consistent than dairy through the spring and summer months before peaking as the winter months approach,” he explained.

Specific to 2020 so far, Maples said a look at the processing changes during the worst months of COVID-19-related plant disruptions showed that beef and dairy cow slaughter faced different reductions.

The worst week for beef cow slaughter capacity was in late April, when slaughter was 19.5% below the same week a year ago. Total dairy cow slaughter didn’t show that same level of reduction but instead declined from week to week for most of the spring, which Maples said occurred alongside the typical seasonal decline.

The number of beef cows processed increased through May and into June. For the first two weeks of June, beef cow slaughter was up 6.7% compared to the same two weeks a year ago.

“Similar to what occurred in calf and feeder cattle sales, at least some of this increase may likely be due to sales delays caused by producers’ decisions to wait or by auction slowdowns," he said. "The relatively strong prices, combined with the low beef cow slaughter in April, provides rationale for the increase in beef cow slaughter in June.”

Maples further noted that beef cow slaughter year to date is up about 2%, while dairy cow slaughter is down 2%. Together, year-to-date total cow slaughter is about the same as a year ago.

Looking ahead, he said lower calf prices could drive increased beef cow culling later in the year. Dairy slaughter, on the other hand, is near the seasonal low point, and rebounding milk prices likely may prevent significant dairy cow culling, Maples suggested.

“While the supply picture is becoming a little clearer, ground beef demand will continue to be key for support of beef cow cull prices,” he said.

TAGS: Prices
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.