FEWER BEEF COWS COME TO TOWN
By Patrick Linnell , CattleFax Director of Cattle Market Research
MARKET UPDATE
Beef cow slaughter always picks up through the fourth quarter of the year as 70 % of cow-calf operations that calve in the spring cull old and open cows . Consistent with history , cow slaughter has had a modest increase from August but remains sharply lower than recent years , a continuation of the pattern in place all year .
In October alone , beef cow slaughter on a weekly average basis was down 26 % or 10,000 head per week . For the full year , beef cow slaughter will likely be down around 640,000 head or 18 % from last year .
Part of the decline in beef cow slaughter is the natural result of the industry starting 2024 with 716,000 fewer beef cows . However , the reduction is also a reflection of a tightening culling rate as producers have become more forgiving with culling decisions .
On an annual basis , beef cow slaughter will drop to 10.4 % of the January inventory , down from 12.4 % last year and the lowest since 2019 . During the aggressive expansion of the last cycle , the culling rate dropped as low as 7.8 % in 2015 . Such an aggressive drop is unlikely this cycle but illustrates the potential for further tightening in beef cow slaughter down the road .
For a near-term perspective , the annualized beef cow culling rate in October was around 10 %. Compared to the 20- year average of 10.7 % for the month , this pace indicates a mild expansionary pace of cow culling . Current drought conditions and generally average to dry fall / winter weather forecasts do not favor the culling rate tightening much beyond this level in the months ahead .
From a cyclical inventory perspective , the drop in beef cow slaughter has not been enough to overcome the tight supply of bred heifers to start this year .
For the full year , beef cow slaughter will likely be down around 640,000 head or 18 % from last year .
As a result , beef cow inventories are still likely to be smaller to begin 2025 , but with a much narrower decline than recent years .
This year ’ s drop in beef cow slaughter , compounded by smaller dairy cow slaughter , has drastically reduced lean beef production and resulted in 90 % lean beef trimmings at record levels since February . Still , cull cow prices have seen their typical break into the fall as seasonally increased slaughter numbers and softening lean demand has pressured both the 90s market and , consequently , cow values .
Nonetheless , cull cow prices remain well above year-ago prices and are record-high for the fourth quarter . Modest price strength is likely for the next few months with more upside beginning roughly in February as spring beef demand approaches and slaughter cow supplies seasonally tighten .
Bottom line : Reduced cow slaughter compared to recent years has supported firm cull cow values even through the seasonal fall weakness . Tight slaughter cow supplies and stout prices are expected to remain the pattern through the winter and into 2025 . www . NCBA . org NATIONAL CATTLEMEN 21