Elevated cull cow slaughter and variety of heifers within the feedlot combine have been key components to observe in 2022. Every have implications for beef manufacturing and cattle provides each this yr and transferring ahead.
Beef cow slaughter has been stronger all through 2022. Throughout August, beef cow slaughter was up about 9 p.c above a yr in the past which is about 24,000 head increased whereas dairy cow slaughter was estimated to be down 1,600 head. 12 months thus far, beef cow slaughter is about 13 p.c above 2021.
Regionally, cow slaughter within the Southern Plains is far increased than in 2021 the place drought has been a significant factor. Area 6 consists of Arkansas, Louisiana, New Mexico, Oklahoma, and Texas and beef cow slaughter on this area is about 30 p.c increased year-to-date in 2022 than in 2021. That’s greater than 150,000 head increased than a yr in the past on this area. These are very excessive ranges of cow slaughter and even surpass the excessive slaughter totals seen throughout the 2011 drought.
Heifer slaughter throughout August is estimated about 10 p.c above August 2021. There was one extra enterprise day in August 2022 which accounts for a few of the enhance. In the meantime, steer slaughter was lower than one p.c above August 2021. Heifer dressed weights are up one pound in comparison with final yr whereas steer weights are even with a yr in the past.
The rise in heifer slaughter and dressed weights are contributing to increased beef manufacturing totals than have been beforehand anticipated. The projections within the newest World Agricultural Provide and Demand Estimates (WASDE) report are for a slight enhance in beef manufacturing throughout 2022 above 2021 which is a shift from the projection at the beginning of the yr of a 3 p.c decline. Larger beef manufacturing from heifers is a key driver.
Whereas elevated cow and heifer slaughter totals are contributing to increased beef manufacturing this yr, the longer-run implications are tighter provides. The upper slaughter totals suggest fewer cows and fewer substitute heifers to provide calves. The present WASDE projection for 2023 beef manufacturing could be about six p.c under the present 2022 projection. Worth expectations are reflecting these tighter provides. Dwell cattle futures costs for 2023 contract months are presently buying and selling between $155 to $161 whereas Feeder Cattle futures costs for 2023 contract months are buying and selling between $185 and $200 per cwt. It seems doubtless that there will likely be some engaging pricing alternatives for cattle producers.
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