As of May 5, 2015, the U.S. Drought Monitor continues to report exceptional drought conditions for California, parts of the Texas panhandle, and western Oklahoma (http://droughtmonitor.unl.edu/). However, recent precipitation in much of cattle country has at least provided positive short-term impacts for forage conditions–for example, Texas has experienced slightly more rainfall than its 30- year average (USDA ARS). While the rains are beneficial and are greening pastures, they are not yet enough to alleviate drought impacts on subsoil moisture.

First-quarter commercial cow slaughter was 6 percent below year-earlier slaughter, reflecting the low inventories and the desire to hang on to cows that have or will have calves in 2015. While commercial beef cow slaughter has been lower yearover-year and declining seasonally, dairy cow slaughter, although still above 2014, has been declining seasonally. The combination of fewer cows and heifers in the slaughter mix will result in a higher proportion of steers, which will contribute to heavier average dressed weights of all cattle. Veal production continues to decline at an accelerated pace due to the high value that calves have as feeder cattle instead of as veal. March 2015 commercial veal production was 6.9 million lbs., 21 percent below March 2014’s 8.7 million lbs.

Feeder cattle that were retained to graze-out wheat pasture have moved off wheat and to market, some at impressive weights. Average monthly estimated placement weights in March 2015 were the heaviest March weights since 2003 and reflect the improved pasture and forage conditions.

According to the April 2015 Cattle on Feed report, U.S. feedlots with 1,000-plus capacity totaled 10.8 million head on April 1, 2015, up slightly from April 2014. Cattle on Feed listed April 1 steers on feed at 5 percent above steers on feed in April 2014. There were approximately 10 percent fewer heifers in feedlots on April 1 than in April 2014–indicating continued interest in heifer retention to support herd expansion. On a year-over-year basis, average placement weights have been higher since August 2014. With more steers than heifers entering the feedlot, it is expected that weights will continue to increase. Placements were up in March 2015 compared with March 2014, with cattle of 800-plus-lbs. the largest category. At the same time, marketings of fed cattle in March 2015 were the lowest March marketings since the series began in 1996.

The proportionally large numbers of heavy cattle being sold at auction may have implications for steer and heifer slaughter later this summer and fall. This scenario is complicated by the possibility that the current constrained steer and heifer slaughter could persist for the rest of the year. Heavy slaughter weights—which would also likely consist of steers rather than heifers—would mitigate to some degree the impact of reduced slaughter on total beef production. Currently, weekly year-to-date federally inspected (FI) slaughter is running just over 7 percent below year-earlier slaughter, but beef production is only 5 percent below year-earlier levels; average weekly dressed weights of all FI cattle in April 2015 were nearly 3 percent (almost 23 pounds per carcass) above April 2014’s weight. Further, 4 Livestock, Dairy, and Poultry Outlook/LDP-M-251/May 18, 2015 Economic Research Service, USDA weights have not yet shown their typical seasonal decline to a May low before again increasing. 

Source: Livestock, Dairy and Poultry Outlook, USDA