Drought continues to force cows to market

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As the drought continues in the Western and Southwestern States, cow slaughter has remained at relatively high rates. From mid-March through at least the week ending June 22, weekly federally inspected cow slaughter has exceeded year-earlier levels, with both beef and dairy cows contributing to the increased year-over-year slaughter. At the same time, weekly feeder cattle sales volumes were generally above year-earlier levels, averaging close to 2 percent above year-earlier sales. However, the tide turned during June when weekly sales volumes declined by more than 15 percent year-over-year. These developments imply inventory changes, which could foreshadow future declines in cow inventories, feeder cattle supplies, and, ultimately, beef production.

Traditionally, average placement weights peak during March-May and again toward the end of summer during July-October. Dressed weights generally bottom in April or May, and then begin increasing into fall, peaking during October. Peak marketings often occur during June when dressed weights begin to increase seasonally from their lows.

Ironically, larger numbers of feeder steers over 800 pounds were placed on feed during March-May 2013 than during the same period in 2012. The share of feeder cattle over 600 pounds making up weekly sales volumes was continuing much higher through the first week in July than is typical and indicates the potential for further large placements of heavy feeder cattle on feed. Despite corn prices in the $7 per bushel range, 750-800-pound feeder steer prices at Oklahoma City have increased steadily since bottoming in late May. These heavy-weight placements will be on feed for relatively short periods and will likely be ready to market during the July-October window, or later if similar heavy placements were made in June or after.



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