More Cows to Slaughter Fills the Beef Supply, Pauses Expansion

U.S. beef cow slaughter increased 10% through mid-April, in part due to herd liquidations stemming from drought in the southern Central Plains.

While industry predictions have called for slowed but continued beef cow herd expansion through 2019, the surge in beef cows at harvest is putting additional beef into the supply chain.

“The rise in cow slaughter comes at a time when fed steer and heifer slaughter has reached its highest level in five years, and last week’s cattle on feed report found 5% more cattle in feedlots than last year,” says Greg Henderson, editor of Drovers. “That means total beef production is on pace to increase 7.5% during the second quarter, with a total 2018 increase of nearly 5%.”

An extended winter grazing period and dry weather pushed many calves to feedlots early, which is likely to disrupt fed cattle marketings through August.  In the near-term, fed cattle market has slipped $10 cwt in the past two weeks, Henderson said.

The silver lining? Good packer margins are gobbling up available beef supplies. The start of summer grilling will also keep this market current.

How does each state stack up? Derrell Peel, Oklahoma State University Extension economist, says 2018 beef cow herd numbers are very similar to 2009 levels, but for different reasons. He offers a review in these factors in A Decade of Beef Cow Herd Dynamics.