MARKET UPDATE
WEATHER IMPACTS ON THE COW HERD
By Matthew McQuagge CattleFax Analyst
The transition from El Niño to neutral weather patterns has provided much-needed precipitation across much of the Southern and Central Plains this past spring and early summer . Consequently , the percentage of beef cows in drought-affected states has dropped to the lowest levels since 2020 . As of June , the latest full month of data , approximately 11 % of the U . S . cow herd resided in a state with moderate or worse drought conditions . For perspective , an average of 24 % of beef cows have been in drought during June in the last 40 years . Within these results , no entire states were categorized as Severe ( D2 ) drought or above . While the latest drought maps still show some pockets of Extreme ( D3 ) and Exceptional ( D4 ) drought , it is not nearly as widespread as last year .
Current U . S . pasture and range conditions , which are running steady with 2023 levels , remain almost two percentage points
below the 20-year-average . When viewed on a regional basis , pasture and range conditions in the Northwest and Southeast are tracking well below average this season while the Midwest and Southwest regions are running along the top end of yearly ranges . Conversely , May 1 hay stocks saw a sharp increase of 47 % from last year to 21 million tons , the largest recorded since 2017 . More harvested forages have contributed to a decline in prices . U . S . average , non-alfalfa hay prices have dropped $ 23 / ton from year-ago levels to $ 149 / ton in June . Meanwhile , the alfalfa hay market is priced at $ 195 / ton , a decline of $ 68 / ton from last year ’ s value .
Moderate or Worse Drought
60 % 55 % 50 % 45 % 40 % 35 % 30 % 25 % 20 % 15 % 10 % 5 %
Percent of of U . . S .. Beef Cowherd Herd in in Drought
This relief to producers in the form of lessened drought conditions and reduced forage costs have translated to a decrease in beef cow slaughter levels . Year-to-date , weekly beef cow slaughter is down 315,000 head , or 16 %, from 2023 levels . Monthly beef cow culling rates , based on harvest levels and Jan . 1 inventories , likewise reflect a stabilization in the beef cow herd . This annualized culling rate has followed the 20-year-average for the last five months and is the lowest level calculated since 2020 . At the same time , cull cow prices have set new record highs reflecting both the dwindling supply and a seasonal slowdown .
A resurgence of drought will be a crucial factor to watch relative to anticipated cow herd expansion . The price signals are in place , but weather patterns will be the determining factor when it comes to the level of expansion that will be permitted . Recent weather forecasts suggest La Niña is favored to emerge , 66 % probability , during the September to November period and persist into winter . This favors a warmer and drier winter , particularly for the Southern Plains . There is further potential for this to remain a multi-year weather event in which case effects can be intensified by the already weakened pasture base .
Bottom Line : Overall , conditions have improved within the last two years . However , forecasts for a reemergence of hot and dry patterns , particularly in the Southern Plains , may limit the rate of expansion . Producers in regions that continue to capture meaningful rainfall will likely begin actively retaining heifers this fall .
80 % Range 40-Yr Avg 2021 2022 2023 2024
0 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source : USDA , NOAA , CattleFax
Months www . NCBA . org NATIONAL CATTLEMEN 27