Normally, cull cow (animals removed from the breeding herd and harvested) prices are highly seasonal, but that was not the case for much of the last two years. Normally, cull cow prices are lowest in the fall when most U.S. cow-calf operations are evaluating their breeding animals and culling. Then, into the new calendar year, prices increase significantly. For example, on average from November until March during the 10-year period from 2005 through 2014 cull cow prices in the Southern Plains increased by about 18%. However, during the last two years, price increases over that timeframe were much less than normal and at times were actually negative. The seasonal increase in cull cow prices since last fall has returned. Prices have increased from the 2016’s fall lows. Still, the monthly average price increases from November 2016 through January and February 2017 were less than normal.
Of course, the driver depressing cull animal prices in the fall of the year is the supply of beef-type cows going to market. Besides tightening supply, as the new calendar year sets-in, fed cattle prices usually begin to increase seasonally which also supports increasing cull cow prices. In the last two years, increasing U.S. cattle supplies have pressured prices of all types of cattle lower year-over-year. For cull cows there has been an additional factor at play, huge imports of lean and manufacturing beef from drought devastated Australia. Imported beef from Australia and South America competes most directly in the cow-beef market rather than in the fed animal arena. Those imports in total have been dropping (see story above).
Looking ahead, cull cow price increases normally begin to run out of steam during March, but do not drop dramatically for several more months. Year-over-year price declines are forecast to continue throughout 2017, but if lower imports persist as expected, that’s one less factor dragging on prices.