Slaughter Cow Market Soars

Slaughter cow prices are driven by the price of 90 percent lean beef trimmings (90s), which posted a price of $317.36/cwt. the first week of March. This is a record high price for 90s in data back to 1978 and undoubtedly an all-time record weekly price. Dairy cow slaughter is down 15.0 percent and beef cow slaughter is down 11.4 percent year over year according to a recent report from Derrell Peel, Oklahoma State University Ag Economist.

On January 1, 2024, the dairy herd was 0.4 percent lower than the previous year. Furthermore, dairy heifer replacements were also 0.4 lower and the number of heifers expected to calve in 2024 was down more than 1 percent. The dairy cow herd has been trending lower since reaching a peak in 2021, as feed prices have risen and squeezed margins for milk producers. In 2023, average milk cow inventories steadily declined from 9.427 million cows in the first quarter to 9.360 million cows in the fourth quarter, largely driven by lower margins in the first half of the year and strong cull cow prices due to tight U.S. beef markets.

Improved margins in fourth-quarter 2023 are expected to be a stabilizing factor for the dairy cow herd in 2024. Slaughter rates of dairy cows fell in the second half of 2023, with the trend continuing into January 2024. Given the relatively tight availability of dairy replacement heifers, the lower slaughter rates suggest that the industry is likely to maintain close-to-current inventory levels for much of 2024. As a result, the projection for number of milk cows in 2024 is lower than 2023, but the quarterly projections have inventories during the fourth quarter at the same level they are projected to be during the first quarter.

Dr. Peel will be the first presenter at the 2024 I-29 Moo University Dairy Beef Short Course on Thursday March 21 during the Central Plains Dairy Expo in Sioux Falls, south Dakota.

Peel’s presentation will cover the current cattle supply and demand fundamentals and expectations for prices, production, and cattle inventories for 2024 and beyond. He will also include interactions between the beef and dairy sectors in the broader beef market.

Other presenters include:

Beef on Dairy Economics: Results of a Video Auction Analysis – Dr. Ken Odde, Kansas State University

Odde’s presentation will cover the results of a video auction analysis of dairy x beef calves. The objective was to determine the value of Holstein feeder steer lots compared with steer lots of other breed descriptions, the value of beef x dairy cross weaned steer calves compared with either Holstein weaned calves or weaned calves of other breed descriptions, and the value of beef x dairy cross weaned steers and heifers compared with weaned steers and heifers of other beef breed descriptions sold through video auctions.

Genetic Considerations for a More Valuable Calf – Dr. Bob Weaber, Kansas State University

Optimization of the value of calves produced in beef x dairy crossing systems requires careful consideration. Dairy cattle breeds bring differing strengths and levels of performance for economically important carcass and production traits and these differences should influence the genetic merit requirement of the selected beef service sires. Weaber will discuss how selection of beef service sires that complement these attributes, especially ribeye area, red meat yield and carcass weight, is critical for dairy producers and other downstream partners to realize the added value and sustainability of the matings.

How Do Dairy Based Cattle Fit into Value-Based Markets? – Dr. Lauren Kimble, Select Sires

Intertwining research findings and industry data, this presentation investigates how the increased volume of beef x dairy cattle in the market has molded trends and mindsets from the dairy producer to the packer, and everything in between. These insights can help dairy producers to participate more effectively in a dynamic and value-driven beef market.

There will also be a morning and afternoon Q & A session moderated by Dr. Madison Kovarna from South Dakota State University.