Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Monday afternoon, according to the Agricultural Marketing Service. There were too few transactions to trend.
Last week, live prices were at $136-$137/cwt. in the Texas Panhandle, $135-$136 in Kansas, $137 in Nebraska and $138 in the western Corn Belt. Dressed trade was at $218.
Choice Boxed beef cutout value was $3.55 higher Monday afternoon at $287.86/cwt. Select was $3.08 higher at $277.05.
Futures and equity markets were closed Monday in observance of Martin Luther King Day.
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When Jan. 1 cattle inventory numbers are released by USDA at the end of this month, odds are they will show continued contraction of the U.S. beef cow herd; the degree is up in the air, though.
“The general feeling among analysts seems to be that the herd likely decreased 1.5-2.0% in 2021, with some possibility that the decrease was over 2%,” said Derrell Peel, Extension livestock marketing specialist at Oklahoma State University in his mid-January market comments, “The level of beef cow slaughter in 2021 was up 9.1% year over year, leading to a culling rate of 11.44% for the year, the highest since 2011. In 2011, the beef cow herd decreased 2.04%. However, the net change in the beef cow herd in 2021 also depends on what happened with beef replacement heifers.”
At the beginning of last year, beef replacement heifers represented 18.7% of the beef cow herd, according to Peel.
“This level of replacement heifers indicates neither significant herd liquidation nor does it suggest aggressive expansion,” Peel says. “In the last two decades, the beef replacement heifer percentage has varied from a low of 16.6% in 2011 (liquidation) to a high of 21.0% in 2016 (expansion) and has averaged 18.2%.”
Last year, Peel explains the inventory of replacement heifers was higher than in 2011, as was the inventory of heifers calving.
“This likely means that some of the additional cow culling in 2021 was offset by more bred heifers entering the herd,” Peel explains. “The heifer calves portion of the replacement heifers from one year ago may well have been diverted to feeder markets but many of the sizable inventory of bred heifers likely entered the herd somewhere. All of this discussion is complicated by the drought conditions in 2021, which impacted what producers had to do as opposed to what they would like to do.”
Most likely, Peel says the inventory of beef replacement heifers will be significantly lower.