Cattle Slaughter & Beef Production in the first half of 2024
According to the USDA July Livestock Slaughter report, cattle slaughter totaled 2.4 million head in June. This is a 12% decrease year-over-year and a 7% decrease since last month. Total cattle slaughter for the first half of 2024 is 4% below the total for the first half of 2023. Beef cow slaughter so far is 15% lower than 2023 and has declined by almost 20% since January. As a result of a decrease in cow slaughter, beef production is expected to decrease in 2024 and 2025. However, beef production forecasts for 2024 have increased by 555 million pounds since January. This is because of an increase in carcass weights of steers and heifers. The forecast for 2024 is now 26.655 billion pounds, a 1% decline from 2023.
The steady rate of steer and heifer slaughter combined with heavier carcasses are offsetting decreased cow slaughter. This is “softening” the beef production decline. Total steer and heifer slaughter for the first half of 2024 are both roughly 1% lower compared to 2023. Dressed carcass weights for steers in June averaged 915 pounds with heifer carcass weights averaging 834 pounds. So far, dressed weights for steer and heifer carcasses average 919 pounds and 842 pounds, more than 2-2.5% higher than 2023.
Beef Demand & Prices
Trimmings from fed cattle carcasses are referred to as 50s and are combined with lean trimmings from non-fed cattle (cull cows and bulls) referred to as 90s, essentially creating ‘80/20’ ground beef. The steady decline of cow slaughter and lean cattle trimmings from non-fed cattle (90s) combined with heavier carcasses from fed cattle (50s) causes disruptions in the ground beef market as the ratio of 90s and 50s becomes imbalanced. As a result, wholesale prices for lean beef trimmings are rising to record levels due to the steady demand of ground beef products. Wholesale prices for 90s are currently $375.20/cwt. This is a 47% increase since January and a 27% increase year-over-year. The average retail value of all fresh beef products is currently $7.99 per pound.
The demand for lean beef trimmings has been driving up prices for cull cattle nationwide. Prices for 85-90% lean boner cows reached an average national price of $129.11/cwt as of June 2024, a 90% increase from the 2018-2022 national average. With expansion bound to start at some point in time, cull cow slaughter will inevitably decline even more as producers reduce culling rates, continuing to affect the supply of lean beef trimmings and cull cow prices.
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