War has contributed to cattle market uncertainty and sharply higher feed costs, record-high cattle on feed, and falling cutout values have hit heavy feeder prices hard. But, cull cow prices have continued to skyrocket since the beginning of the year, shooting past $75 per cwt in the Southern Plains. A year ago, 85-90% lean cull cows averaged about $46 per cwt.
Cow prices are increasing in spite of large cow slaughter. Cow slaughter during the first two weeks of February totaled 145,000 head, or more, per week. That is the largest weekly slaughter since December 2012. Beef cow slaughter is extremely large, rivaling peak Fall slaughter levels. This large beef cow slaughter is coinciding with seasonally large dairy cow slaughter, which typically peaks early in the year.
High cow beef prices are providing some insight into beef demand. Both the cow beef cutout and the wholesale 90 percent lean beef for ground beef are well above a year ago, at $229 and $284 per cwt, respectively. But, wholesale middle meat prices have dropped in recent weeks with both wholesale ribeye and strip loin prices lower than last year. Consumers may be shifting purchases to more ground beef and fewer steaks in response to high retail prices.
Increasing milk prices should slow dairy culling in the coming weeks. Beef cow culling is going to be greatly influenced by drought and costs. The rate of culling over the last year should have already moved older, less productive cows. Reduced dairy culling should pull down total cow slaughter and support prices in the coming weeks.