Rainfall has been abundant in most areas of the United States. The June 30, 2015, U.S. Drought Monitor indicated very little or no drought remaining in the United States, except in the areas west of the Rocky Mountains. In some areas, rainfall and storms have hampered wheat and hay harvests and adversely impacted other agricultural activities and commodity quality. Current precipitation could be sufficient in much of the country to support pasture use plans through the rest of the summer and into fall.

Weekly federally inspected beef cow slaughter has continued to decline year over year, reflecting the effect much-improved pasture conditions are having on the beef cow herd. At the same time, dairy cow slaughter has increased slightly year over year, but not by enough to offset the effect of declining beef cow slaughter on total cow slaughter. The increasing dairy cow slaughter is likely in response to lower year-over-year milk prices. Further beef cow retention will keep a lid on cow slaughter for the foreseeable future.

Weekly feeder cattle sale volumes at the Oklahoma National Stockyards have continued to decline year over year, and prices have held up in recent weeks. Prices for light-weight feeders have averaged 27 percent higher year over -year since this past January, with heifer prices showing the most strength. This may reflect the declining representation of heifers in steer-heifer numbers, likely due to heifer retention for expanding the cow herd. The July Cattle report from the National Agricultural Statistics Service (NASS) will give further indication of followthrough on heifer retention and cow-herd expansion plans for 2015. In addition to providing support for feeder heifer prices, declining proportions of heifers in feedlots—along with more time on better quality pasture—may be contributing to the slightly heavier estimated feedlot placement weights, as generally heavier steers constitute larger proportions of the mix. This is similar to the boosting effect that fewer heifers in the slaughter mix is having on average dressed weights for all cattle.

NASS’ Cattle on Feed, released June 19, 2015, showed cattle on feed in feedlots with capacity of 1,000-plus head in June up 1 percent compared with last June. The second quarter likely experienced lower cattle placements than second-quarter 2014, in part due to producers holding cattle longer for grazing on the newly lush pasture. Cattle on Feed reported cattle over 800 pounds placed in May totaled 710,000 head, which is equal to May 2014 but may give 2015 the largest secondquarter share for that weight category since the series began in 1996. In addition, May 2015 marketings were the lowest since the series began in 1996. Marketings are expected to be higher in the early part of 2016 compared with 2015 and 2014 as stocker operators and other backgrounders take advantage of good forage conditions and retain feeder cattle on pasture longer, pushing placements into feedlots further into fall and winter. 4 Livestock, Dairy, and Poultry Outlook/LDP-M-253/July 16, 2015 Economic Research Service, USDA At the same time, cattle feeders lost significant ground during June as fed cattle prices declined, widening the negative margins at levels that were already well below break-even. Monthly average 5-area fed steer prices dropped over $9 per cwt from May to June. Evidence from the High Plains Cattle Feeding Simulator (http://www.ers.usda.gov/data-products/livestock-meat-domestic-data.aspx) indicates that since this past January, losses have often exceeded $100 per head and are likely to continue into fall as break-evens continue to increase into the mid- to upper-$160 per cwt range, largely due to relatively high feeder-cattle prices and declining fed-cattle prices (see figure below). Farmer feeders may opt for selling their corn on the market rather than buying high-priced feeder cattle and feeding corn to those animals.

The June 25, 2015, NASS’ Livestock Slaughter reported May 2015 beef production dropped 7 percent from May 2014. Commercial cattle slaughter is expected to remain tight for the remainder of 2015, slightly lower than 2014 levels. Dressed weights of all cattle have increased year-over-year each month since June 2014. In May 2015, steers were 24 lbs heavier than in May 2014, and heifers were heavier by 17 lbs. While dressed weights of cows were also 21 lbs heavier in May, the increase was due to the increased proportion of heavier dairy cows in the cowslaughter mix. Dressed weights of all cattle bottomed out in April-May at well over 800 lbs—record levels for the time of year—and appear to be increasing seasonally into the summer months. With the increase in steers and dairy cows in the slaughter mix, dressed weights for all cattle will likely set new records in the coming months. Average dressed weights of all cattle in 2016 will likely continue at levels slightly higher than levels in 2015.