Cull-cow prices have moved higher as slaughter declines, according to USDA’s Livestock Dairy and Poultry Outlook report released March 14. Producers in many areas culled deeply over the past few years producing a younger herd and a shortage of cull cows, At the same time, many ranchers are shifting toward expanding their herds. The report notes the January 1, 2014, inventory of heifers on feed in 1,000-plus head feedlots was the third-smallest proportion of total January 1 cattle on feed since the series began in December 1995, suggesting more heifers are staying on ranches for breeding.
Other key points in the report include:
- Drought continues in California and the Southwest, but some weather models are predicting an El Niño event, which could bring drought relief to the region by the fall of 2014.
- Feeder cattle prices have increased at a relatively modest rate, but recent fed cattle prices have been extremely volatile.
- Choice retail beef has fallen from its November 2013 high of $5.41 per pound, but all-fresh beef prices continue to set higher records each month ($5.04/lb in January), in part sustained by the current popularity of ground beef products.
- U.S. beef exports rose 5 percent in January 2014 from the previous year. Shipments increased to Hong Kong (+69 percent), Japan (+44 percent), and Mexico (+24 percent).
- Exports to Japan have gained steadily over the past year since a restriction was relaxed in February 2013 to allow for imports of U.S. beef from cattle aged 30 months or younger. U.S. beef has been stealing market share from Australian beef in the Japanese market, partly due to Australia’s growing export business to China.
- The forecast for U.S. exports in 2014 was increased 100 million pounds to 2.435 billion pounds due to strong beef demand in Asia. However, lower production will result in an expected decline in exports of 6 percent year over year.
- U.S. beef imports declined 9 percent in January from a year earlier. Imports fell by the greatest volume from New Zealand, with a decline of 15 percent.
- U.S. cattle imports totaled 157,299 head in January 2014, nearly unchanged from a year earlier. USDA expects cattle imports to fall 2 percent in 2014 to 1.95 million head, as inventories remain tight in Mexico and in Canada.
Read the full Livestock Dairy and Poultry Outlook report.