Last week’s “Industry At A Glance” chart focused on respective heifer inventories over time. The discussion surrounded the importance of both heifer retention and beef cow slaughter as indicators of cowherd dispersion or rebuilding. The discussion included the following observation: “The annual inventory of beef replacement heifers has stayed relatively constant over time. That reality underscores the overwhelming contribution of beef cow slaughter (vs. a slowdown in heifer retention) when explaining the declining cow inventory.”

The discussion also noted, “There’s seemingly an increasing appetite for cowherd rebuilding – that’ll occur from both a slowdown in cow liquidation and greater retention of heifers for the purpose of being put back into the cowherd.”   However, that inherently raises the question regarding beef cow slaughter trends.  

The graph below depicts monthly beef cow slaughter as a percentage of Jan. 1 beef cow inventories. Clearly, there is much monthly and seasonal variation. However, the rate clearly increased beginning in earnest in 2006 and continued that way through 2011.

Since that time, though, the rates have begun to reverse (February’s rate of .69% represents the slowest slaughter rate since April 2006).   Annual totals (as a percentage of cowherd inventory) are as follows:

Year

Annual beef cow slaughter rate (%)

2005

7.72

2006

9.12

2007

9.73

2008

11.00

2009

10.48

2010

11.57

2011

12.31

2012

11.09

2013

10.68

 

Accordingly, the beef cow inventory decline in 2013 was approximately 250,000 head; the smallest decline in three years and sharply lower vs. a decline of 860,000 head in 2012.

The data indicates beef producers are beginning to have more risk appetite and interest in rebuilding the cowherd – or at the very least willing to begin stabilizing the beef cow inventory. Clearly, though, any number of factors could disrupt that strategy.

How do you foresee this taking shape in in the next several years? What factor(s) represent the largest source of risk that might reverse the slowdown in culling and begin to take a larger bite out of beef cow numbers in 2014? Leave your thoughts below.