After five years of beef cowherd liquidation, the general consensus among agriculture economists was that producers would see cow liquidation slow to a crawl and beef cowherd expansion begin in 2001. It is widely thought that a smaller calf crop, higher beef demand and two years of profits will encourage cow-calf producers to add cows to their herd.

Evidence of the transition from liquidation to expansion can be seen in USDA reports that beef replacement heifer retention is up 2 percent from last year. But contrary to common expectations, beef cow slaughter has increased substantially over year ago levels. According to Drovers' Economic Indicators, year-to-date beef-cow slaughter during February, March and April averaged 10 percent higher than the same period in 2000.

More than a few market analysts are baffled. Why are we killing more cows amid supposed expansion? The adequate moisture, the greening of spring grass and profit margins around $100 per calf typically cause a drop in marketing's of utility and commercial slaughter cows.

While it is still unclear, price is most likely part of the answer. Prices for utility and commercial cow slaughter cows are the highest they've been since 1994. Drovers index of the female market calculated the midpoint value of slaughter cows as $43.63 per hundredweight. Canner and cutter slaughter cows had a midpoint value in April of $37.21, also the highest since spring of 1994.

A 10 percent increase in slaughter cow supplies coupled with record prices can only mean one thing-higher demand. Wholesale beef prices were near record levels for 90 percent lean ground beef according to Cattle-Fax analyst Bryan Vasseur. One could speculate that stepped up promotion of big beef menu items by fast food leaders such as McDonalds and Burger King are driving that demand.

No matter what caused the increase demand, older cows worth $500 are worth your attention. It's no secret that the nation's beef cowherd is aging. Producers have fended off culling for as long as possible to get "one more calf." But face it, they can't stay around forever. So if you have older cows nearing the end of their careers the present profit opportunity may exceed that of having "one more calf." If slaughter levels moderate into the summer, cull cow values may continue to have support and trade in the same general price range despite larger over all beef supplies from the fed cattle sector. If you plan to retain more replacement heifers this year, early weaning your calves and strategic marketing of cull cows before the fall runs could make expansion a little easier to cash flow.