Cow Market Pressure Likely to Increase
by Derrell S. Peel
Oklahoma State University
Cull slaughter and breeding cow prices are likely to come under more downward pressure in the coming weeks as drought forced sales continue. In the southern Plains it is not necessarily larger sales of cows that will increase the pressure on cow prices as increased cow culling has been the case all year. Region 6 beef cow slaughter is up 44 percent for the year to date. It is the additional of more cows from other regions combined with continued heavy cow sales in the Southern Plains that may push cull cow prices lower. Rapid deterioration of forage conditions in the central and northern plains and the southeast has added additional pressure to cull markets. On the positive side, the overall meat market situation is somewhat improved compared to the first half of the year, especially with respect to poultry supplies and that may firm up the hamburger market. Hopefully this will lessen the impact of additional supply pressure as a result of drought forced culling.
So far this year, beef cow slaughter in the region 6, that includes Oklahoma, Texas, Arkansas, Louisiana and New Mexico has been 422,100 head which is equivalent to 4.49 percent of January 1 beef cow inventories in these states. In 2005, beef cow slaughter at this point in the year was 293,400 head, a rate of 3.13 percent of January 1 beef cow inventories. This represents an increase of 1.37 percent in culling or an additional 128,700 head. This does not include any beef cows that have been relocated outside the region due to drought. Decreases in beef cow numbers in this region combined with additional culling in some other areas could well result in a decrease in beef cow inventories come January.