Guest opinion

Jun 29, 2012
by WLJ
Guest Opinion

2012 beef cow slaughter shows less drought impact ... more ?

Beef cow slaughter so far this year is down over 9 percent compared to the same period last year. In the last six weeks, beef cow slaughter is down nearly 16 percent compared to last year. These data clearly reflect improved drought conditions compared to last year, especially in the Southern Plains. So far this year, beef cow slaughter in federal slaughter Region 6, which covers the 2011 drought region, is down over 19 percent compared to all other slaughter regions in which the remaining beef cow slaughter is down 5.2 percent. In the last six weeks, Region 6 beef cow slaughter is down nearly 31 percent year over year while the rest of the country is down nearly 9 percent.

Last year, the situation in the Southern Plains was in sharp contrast to the rest of the country. At this time last year, the year-to-date total beef cow slaughter for Region 6 was up 12 percent from the same period in 2010, while the rest of the country was down 11 percent, leading to a national total that was down nearly 5 percent. In other words, last year at this time, the growing drought impacts were offsetting decreased beef cow slaughter in other regions which reflected industry attempts to stabilize or increase beef cow numbers. Of course, the drought won the day last year and by the end of the year, the 21 percent annual increase in Region 6 beef cow slaughter more than offset the 1 percent decrease in the rest of the country and resulted in an annual increase in beef cow slaughter of nearly 5 percent. So far this year, Region 6 and the rest of the country are acting consistently with decreased beef cow slaughter in all regions. In fact, Region 6 is leading the pack with the total decrease in beef cow slaughter in the region, down more than twice as much as slaughter numbers were up in the region at this time last year.

The summer period will be critical as the majority of the drought culling last year occurred in the late June - September period. In 2011, Region 6 beef cow slaughter in this summer period was up over 32 percent from 2010. Given the comparisons so far this year to last year, yearover-year decreases in Region 6 beef cow slaughter of 35 to 45 percent could occur for several weeks, if not the average of the entire summer period. Beef cow slaughter decreases of this magnitude will help pull national beef cow slaughter down even more into double digit decreases compared to last year.

The year-over-year decreases in beef cow slaughter in Region 6, as well as the rest of the country, suggest that industry is not only offsetting last year’s drought-enhanced slaughter rates but additionally represent decreased slaughter consistent with attempts to at least stop herd liquidation. The limited number of replacement heifers available makes herd expansion possibilities remote, at best, this year. Decreased cow slaughter of roughly 18-20 percent on an annual basis is needed this year to avoid additional net beef herd liquidation. The current pace of decreased beef cow slaughter suggests liquidation could stop or be reduced to a minimal level this year. However, recent deterioration of pasture and range conditions across several regions could easily lead to reduced heifer retention and moderation of beef cow slaughter decreases. A few weeks of dry conditions could push the beef industry back into herd liquidation and postpone heifer retention another year. —

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist