First-Half Cow Slaughter Could Be Largest Since 1996

June 19, 2013 04:58 AM

USDA's Economic Research Service (ERS) says due to the ongoing drought in the western U.S. and declining cow-calf margins has led to a pickup in cow slaughter compared to year-ago. Through May 23, 2013, second-quarter federally inspected weekly cow slaughter averaged 10% larger than year-ago. ERS says first-half 2013 total commercial cow slaughter is projected to be three percentage points above first-half 2012 slaughter and could be the largest since nearly 3.5 million cows in 1996.

"This high cow slaughter, combined with high heifer slaughter, implies a further decline in the national aggregate cow inventory and potentially reduced supplies of beef for several years into the future," states ERS.

Regarding the weather situation, ERS says, "While predicting a neutral La Nina/El Nino season, the Climate Prediction Center reported that some models were leaning toward a slight probability for a weak La Nina. Responsibility for the drought in 2011 was attributed to a strong La Nina. Thus far in 2013, drought is continuing in most of the Western United States, particularly in the Southwest, while much of the East -- including the corn producing areas of the Midwest -- is dealing with too much precipitation, delaying corn plantings. Late freezes have also adversely affected the winter wheat crop in many places. As a result, prospects for the summer grazing season are very mixed across the United States."

Due to expectations that beef production in 2014 will be down around 5% from this year, USDA expects cash steer prices in 2014 to average $128 to $138, which would be an increase from $125 to $130 projected in 2013.

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