Author: David Anderson

Recent SAT articles on the cattle market have mentioned the surge in fed cattle dressed weights as an important factor in boosting fed beef production in 2024.  This article puts 2024’s dressed weights into some historical context and looks at some factors that will influence dressed weights this year. Since 1964, federally inspected steer dressed weights have increased from 662 pounds to 931 pounds in 2024.  That is a 41 percent increase over that time period.  A simple average of percentage change per year equals 0.68 percent, or 4.75 pounds per year increase in steer dressed weights.

The chart of steer dressed weights illustrates this trend in increasing weights.  It also illustrates that this growth is not a straight line of increasing weights every year.  There are many examples of year-to-year declining steer weights.  Many of these years with large weight changes correspond to years with interesting challenges.  For example, steer dressed weights declined 28 pounds from 1974 to 1975 and rebounded 23 pounds from 1975 to 1976.  Other examples might be 2001-2003 or 2014-2016. The 23 pound increase in annual average dressed weight from 2023 to 2024 is significant, but is not the largest year-over-year increase.  Even larger annual increases were recorded in 1985, 1994, 1998, 2002, and 2020.  

Large annual increases are often followed by declining weights.  Could weights decline in 2025?  There are several factors that could lead to a decline in weights including winter storms that pull down weights.  As cattle numbers further tighten, the need to run packing plants at efficient levels could pull cattle out of feedlots faster and lighter.  However, good beef demand will create an incentive to try to produce more beef per head pushing weights higher to offset fewer cattle.  Continued lower corn prices lowers the cost of gain which is an incentive to feed to heavier weights.  

We might consider the effect of increasing weights and the implied increase in production per cow on beef cow inventory in the future.  Heavier weights implies fewer beef cows are needed to maintain level beef production.  The 23-pound increase in dressed weight multiplied by the approximately 15.1 million head of federally inspected steers slaughtered in 2024 is the equivalent of about 371 thousand steers.  Put another way, increased dressed weights offset the need for 371,000 steers suggesting the need for fewer cows.  This is a rough example that could use some refinement, but the point remains that increased weights likely impact the cow herd expansion.

This article used only steer dressed weights.  Heifer dressed weights have increased at an even faster rate and cow weights have increased, too.  Heavier weights are not limited to cattle as hog and poultry weights have increased over time but, those weights are for another article.  There is little reason to expect weights to stop their long-term growth.  But the data shows it’s a bumpy ride to heavier weights with fits and starts along the way.

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Anderson, David, and Josh Maples. “Fed Cattle Weights and Herd Expansion.” Southern Ag Today 5(3.2). January 14, 2025. Permalink

By Christmas Eve you probably have your Christmas dinner plans already made.  This article looks at wholesale meat prices for some popular celebration cuts.  Wholesale prices are used due to a lack of retail prices for many cuts.  These prices give a good fundamental look at meat prices even though a grocery store customer might have scored a deal through weekly features at their store.

Beef

Prime rib, a standing rib roast, or ribeyes are a great holiday dinner.  Ribeye prices increased, as usual, in the runup to Christmas.  Prices normally increase this time of the year as demand picks up for these cuts for holiday dinners.  Prices increased more than seasonally this year compared to prices last year or a 5-year average.  Wholesale, boneless, ribeyes hit $15.61 per pound before dropping to $12.00 per pound in mid-December after holiday buying hit its peak.  Strength in the primal rib value boosted boxed beef cutout values which spilled over into higher fed cattle prices late in the year.

Pork

Hams jumped higher while pork loins languished late in the year.  Wholesale 23-27 pound hams increased to $1.09 per pound by mid-December, well above last year’s $0.76 per pound.  That was not the high price for the year as the peak occurred in mid-year, as is often the case with pork due to normally reduced supplies during summer.  Pork loins were $0.94 cents per pound compared to $1.01 last year.  Hams, bellies, and ribs prices have boosted the pork cutout values.  If pork tamales are included in your holiday fare, pork butts have helped.  Pork butt primal values have been lower than last year through most of the Fall.  

Lamb

Wholesale rack of lamb prices have been about the same as a year ago, $11.44 per pound, in recent weeks. Light racks have been a little higher than last year while medium racks have been a little cheaper than the year before.  Loin prices have been about equal to a year ago throughout the Fall.  

Turkey

Wholesale 8-16 pound hen prices jumped higher after Thanksgiving.  They hit $1.04 per pound in mid-December compared to $0.86 per pound a year ago.  Prices remain well below the 5-year average.  Continued turkey losses from HPAI and the financial hit from low prices will likely continue to cut supplies and move prices higher in the new year.

Whatever your holiday dinner choice, Merry Christmas and Happy New Year from all the Southern Ag Today livestock economists!

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Anderson, David. “Christmas Dinner!” Southern Ag Today 4(52.2). December 24, 2024. Permalink

2024 has been a roller coaster year for the dairy industry.  The year started with low prices, and continuing financial problems that began in 2023. But, price recovery by mid-year spurred some profits and herd growth. 

Low prices led dairy farmers across the country to reduce the number of milk cows in 2024. Dairy cow numbers bottomed out in July at 9.319 million head. That was the fewest since February 2016.  Milk production per cow actually declined, year-over-year, which is a historical rarity. The combination of fewer cows and less production per cow led to lower milk production than the year before in 5 of the first 6 months of 2024. 

Strategies to cut production in response to low prices have led to very tight supplies of replacement heifers. Replacement heifer prices, for those looking to buy, surged to record highs late in 2024. For example, springer heifers hit $2,700 per head in early December at the Smiths Grove Kentucky dairy auction.

Herd expansion due to rising prices later in 2024 was led by Texas dairies. By October, Texas’ milk cow numbers hit a record of 675,000.  That was 40,000 head more than October of 2023.  This herd expansion led to growing numbers in the broader Southern Plains.  Dairy cow numbers continued to decline in other areas of the country.  Across the Southeast, monthly dairy cow inventory is reported for Florida, Georgia, and Virginia.  Compared to the previous year, Georgia and Virginia cow numbers declined by 5,000 and 3,000 head to 85,000 and 66,000, respectively.  Florida cow numbers held constant at 100,000 compared to October 2023. 

Dairies in the Southeast have largely been spared from HPAI. It began in late 2023 or early 2024 with a mystery illness that was identified in the Spring as HPAI.  The illness led to reduced milk production and some more culling. 

Reduced milk production led to higher milk prices. Cheese, butter, powder, and whey prices all increased. Weekly 40 pound cheddar cheese blocks in the wholesale market began the year at $1.53 per pound and climbed to the mid-$1.90s by mid-year, then climbed again to $2.28 per pound.  The bottom dropped out after that peak, much like a rollercoaster, to $1.77 per pound at the beginning of December.  Butter prices did much the same, a year-long climb to $3.19 per pound then a drop to $2.59 per pound, back to where the year began.  Federal order uniform milk prices climbed to over $25 per cwt by late in the year but will start to decline reflecting the lower cheese and butter prices.

Cattle and calf prices keep climbing towards the end of the year.  It’s not uncommon for prices to rise late in the year, but this time between Thanksgiving and New Year’s can be volatile.  This year-end rain in areas of the Southern Plains and fewer calves for sale are working to boost calf prices while.  There is also a week’s worth of data on feeder cattle imports from Mexico which gives some insight on the potential impact of import restrictions on Mexican cattle due to screwworm regulations.  

In the Southern Plains, lighter weight, 400-500 pound, calf prices have jumped about $30 per cwt over the last month.  In the South, the same weight calves are higher, but have not seen quite as large of increase, up about $25 per cwt.  Heavier 500-600 pound steers are up around $20 to $25 per cwt in the Southern Plains and South, respectively.  From Texas across the south to Georgia, 700-800 pound feeders are up about $8 per cwt over the same period.  Seasonal lows in the calf market are in the rearview mirror for 2024.  

Recent rains have helped stocker prices.  The drought monitor map indicates some significant improvement across wheat pasture country.  Better late than never.  The rains have boosted prospects for late pasture grazing and likely boosted supplies of pond and tank water that had run short.  

It appears that fewer calves are for sale following the larger Fall runs.  Over the last month, fewer cattle have been reported in USDA’s weekly market receipts data.  The daily CME feeder cattle index indicates fewer cattle changing hands.  Local auction markets around the country also report fewer animals.  When combined with rain boosting stocker demand, tighter supplies are further helping prices.

Fed cattle prices are climbing too.  Southern Plains fed steers hit $190 last week rebounding from about $185 a month ago.  It looks like the cow market has already passed its seasonal low as beef cow slaughter is declining.  

The first full week of data on feeder cattle imports from Mexico were released last week.  For the week ending November 30^th no cattle (0 head) were reported imported through the 11 ports of entry.   It’s worth remembering that was Thanksgiving week and mid-week holidays can lead to some wide swings in data.  Feeder cattle imports are normally large in November and December as cattle are imported for winter grazing and direct feedlot placement.  The timing of the import restriction is likely causing a bigger price impact than it would at other times of the year when imports are typically lower.

Rain and tighter supplies are some fundamental factors at work in boosting calf prices.  Those positive factors are likely offsetting the impact of some increasing corn prices. Tighter supplies of claves will continue to boost calf prices in the new year.

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Anderson, David. “Rising Prices at Year End.” Southern Ag Today 4(50.2). December 10, 2024. Permalink

Over the weekend, USDA APHIS announced a new restriction on livestock from Mexico due to an occurrence of New World Screwworm (NWS) in the Southern Mexican state of Chiapas.  APHIS is restricting the importation of animal commodities originating from, or transiting through, Mexico immediately while awaiting more information of the size and scope of the outbreak.

History

The screwworm, Cochliomyia hominivorax, is a fly that is a flesh-eating parasite. The screwworm fly spreads by depositing its eggs around an open wound.  The larvae then crawl into the wound feeding on the animal’s flesh.  The adult female fly mates only once in its lifespan, which led to the strategy of controlling the screwworm fly by releasing sterile male flies, thus preventing reproduction.  Eradication efforts through releasing sterile male flies began in the 1950s and resulted in eradication from the U.S.  In fact, it was ranchers who donated money and raised $2.8 million to match the federal appropriation that ramped up eradication in Texas in the early 1960s.  Later coordinated efforts with Mexico and Central American countries pushed the flies down to Panama.  But in recent years, the flies have been making a comeback in Central America overwhelming the strategy of sterile fly release.  The last reported occurrence in the U.S. was in deer in Big Pine Key, Florida in 2016.  

During the eradication efforts in the 1950s, ranchers could send in sample tubes of flies for identification.  Knowing the location of occurrences allowed for pinpointing release areas.  Figure 1 is a picture of the sample tubes.  Figure 2 is a map of the screwworm overwintering range in average years (Graham, 1985).   

Imports

Feeder cattle imports from Mexico are an important source of cattle for U.S. cattle feeders and beef production.  Imports have a highly seasonal pattern with the most entering in the Spring and late in the year.  These steers and spayed heifers often first go to stocker grazing programs and then to feedlots.  Imports in 2024 have amounted to about 5 percent of feedlot placements.  Cattle enter the U.S. through 11 ports of entry: 3 in Arizona, 2 in New Mexico, and 6 in Texas.  Year to date, 1,195,702 feeder cattle have entered the U.S.  Of those, 29 percent have entered through Arizona, 51 percent through New Mexico, and 20 percent through Texas.

A simple, back of the envelope analysis would estimate that a 5 percent decline in feeder cattle supplies would lead to about an 8.6 percent increase in feeder cattle prices, all else held equal.  We might also consider the impact regionally, as most of these feeder cattle would be fed in the Southern Plains or the Southwest.  The limitation on imports would likely have a significant effect on feeders in those areas. 

Other Considerations

One of the major differences today compared to pre-eradication is the presence of many more deer and exotics.  In the “old days”, there were few deer in parts of Texas due to the impact of screw worms on deer survival.  Eradication allowed rapid increases in the deer population.  The recent development of the exotic wildlife industry presents the potential for much larger economic harm from re-infestation.

Old timers will speculate that one reason there were so many great team ropers from Texas is because of the constant checking cattle closely and doctoring them for screw worms.  The pest even enters popular literature in The Good Old Boys by Texas writer Elmer Kelton.  In this novel the protagonist, Hewey, spends a ton of time roping, checking, and doctoring their calves.

It’s important to remember that screw worms can be controlled.  The use of sterile male flies allows proven and effective control.  Cooperation with our southern neighbors pushed eradication as far as Panama.  But, as is often the case, these old menaces return.  Fortunately, control is possible but, it requires vigilance.

Figure 1.  Tubes for Ranchers to Return Screwworm Samples to the Eradication Program.  From the library of David Anderson.  

Figure 2.  Map of Screwworm Range.  

For Further Reading:

Graham, O.H. (editor) “Symposium on Eradication of the Screwworm from the United States and Mexico.” Entomological Society of America.  1985.

Kelton, E.  The Good Old Boys.  Doubleday.  1978.

Novy, J.E.  “Screwworm Control and Eradication in the Southern United States of America.”  FAO.

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Anderson, David, Josh Maples, and Charley Martinez. “An Old Menace.” Southern Ag Today 4(48.2). November 26, 2024. Permalink