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Agricultural News

Dr. Derrell Peel on Cattle Slaughter Dynamics

Mon, 12 Oct 2020 16:43:33 CDT

Dr. Derrell Peel on Cattle Slaughter Dynamics Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel talks about cattle slaugher dynamics.

Cattle slaughter for the year-to-date through the week ending September 26, 2020 was down 3.6 percent year over year. This includes a 4.2 percent decrease in steer and heifer slaughter; a 1.2 percent decrease in total cow slaughter; and a 3.7 percent decrease in bull slaughter so far this year. Varying slaughter patterns across different cattle classes make it difficult to project where slaughter will end up as the year closes out.

The biggest component of cattle slaughter is steer slaughter, which is down 4.3 percent year over year through late September.   Through March, prior to COVID-19 impacts, steer slaughter was up 5.1 percent year over year. By the end of May, the cumulative steer slaughter for the year to date was down 7.2 percent before slowly recovering through the summer and early fall. In the last eight weeks, steer slaughter in August and September has been up 2.2 percent year over year. Steer slaughter is projected to increase 3.0 - 3.5 year over year in the fourth quarter leading to an annual total down roughly 2.5 percent compared to last year.

In the first half of the year, cumulative heifer slaughter was down 5.1 percent. In the third quarter of the year, heifer slaughter was down 1.8 percent year over year leading to the current year-to-date decrease of 3.9 percent year over year.   Heifer slaughter is projected to be down 2.0 2.5 percent year over year in the fourth quarter. This would result in an annual heifer slaughter total down roughly 3.5 percent compared to 2019.   

Dairy cow slaughter has decreased sharply since June leading to a year to date decrease of 4.9 percent in late September. The year over year decrease in dairy cow slaughter since late May has been nearly 9 percent. The rate of decrease is expected to slow in the fourth quarter and may be down roughly three percent. Total annual dairy cow slaughter is expected to be down about 4.5 percent year over year.

Beef cow slaughter is up 2.7 percent for the year to date as of late September. At the end of the first quarter, cumulative beef cow slaughter was nearly 11 higher year over year. By the end of the second quarter, cumulative beef cow slaughter had decreased to roughly 3.5 percent higher than the previous year. The year over year increase slowed more in the third quarter with beef cow slaughter the past eight weeks unchanged from last year. Beef cow slaughter is projected to be roughly 2 percent above year ago levels in the fourth quarter leading to an annual total beef cow slaughter roughly 2.5 percent higher year over year.

There are many dynamics in cattle slaughter markets in the fourth quarter that will determine total slaughter for the year. Current estimates are for total annual 2020 cattle slaughter to be down roughly 2.5 percent year over year. Carcass weights for steers and heifers are expected to be record large in 2020, with steer carcasses exceeding 900 pounds for the first time. Lower cattle slaughter and larger carcass weights are projected to result in total beef production close to unchanged from last year. Total 2020 commercial beef production is projected to be 27.1 27.3 billion pounds.



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