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Cull cow prices sharing in spring rally

Rising prices happening even with high dairy cow slaughter levels.

Cull cow prices been sharing in the recent cattle price rally, according to Texas A&M AgriLife Extension Service expert David Anderson. Cull cow prices typically increase from fall into late spring, and that increase is well underway as they have been climbing along with fed cattle prices, he said.

Cow prices in the Southern Plains have increased about $13/cwt., or 32%, from about $40/cwt. in January to $53/cwt. at the end of March. Anderson said the meat market indicates higher values for the meat from cull cows.  Ninety percent lean beef prices have climbed 10% to $218/cwt. since January.  Over the same period the cow-beef cutout value is up 7.7%, he relayed.  

The rally has even come during historically large cow slaughter. Anderson reported that dairy cow slaughter has exceeded 70,000 per week for that last 5 weeks and that the 72,700 head sent to market the first week of March was the largest weekly dairy cow slaughter since 1986. Beef cow slaughter, on the other hand, dropped below last year’s levels by mid-March, 53,000 head compared to 56,000 head this time last year.  Total beef and dairy cow slaughter is the most since drought forced movement in 2012-2013, Anderson said.

“Some significantly higher cow prices than those in the Southern Plains have been reported in Northern markets.  One of the results of the 2010-2012 Southern Plains drought has been a loss in regional cow packing capacity.  New capacity in the Northwest has added value to cull cows further North.”

Dairy cow marketings is expected to decline later in the year as increased culling has an effect on milk production and prices, Anderson explained.

“Some milk market recovery should lead to higher milk prices and slower culling rates.  The slowing rate of growth of the beef cow herd should slow beef cow marketings.  The combination of slowing culling, limiting the growth in supplies, should provide some price support.”

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