Last year it was beef producers who culled deeply into their cow herds in response to drought and high production costs. That trend leveled off this year, but dairy producers have made up the difference with herd reductions due to low milk prices.

Analysts at the Livestock Marketing Information Center say the latest available data show that as of the end of August, federally Inspected cow slaughter on a weekly average basis in 2009 has been nearly 2 percent larger than last year and over 16 percent higher than the 2003-2007 average.  Dairy cow slaughter through the end of the August was 15 percent higher than in 2008 and about 21 percent larger than the prior five-year average. Beef-cow slaughter during the same period was on average nearly 8 percent smaller than a year ago, but compared to the 2003-2007 average was still about 13 percent larger. LMIC analysts note that that last year, dairy cows as of mid-August represented around 42 percent of the cow slaughter mix, this year dairy cows have accounted for about 48 percent of slaughter.

Cull-cow prices have averaged lower than last year during the first eight months of 2009, and dairy slaughter is just one of the reasons. LMIC also lists larger imports of lean beef, especially from Australia and New Zealand, a year-to-year decline in cow byproduct values, very low wholesale pork prices, and increased U.S. cow slaughter. 

From January through August, lean cull cow prices on a weekly basis in the Southern Plains averaged just under $48.00 per hundredweight, 12 percent lower than 2008’s and 6 percent less than the 2003-2007 average price.  Cull prices peaked in late June at just below $55.00 per hundredweight, but have eroded through the summer. LMIC analysts expect cull-cow prices to decline at least well into the fourth quarter of this year as dairy cow slaughter remains large and pork prices keep beef sales on the defensive. 

Dairies are likely to continue reducing their herds for the rest of this year and into the first part of 2010. But through next year, cow prices should improve as culling rates drop off. For more, go to the LMIC Web site.