Probably the most frequently asked question I am getting relates to how much the drought is adding to herd liquidation in 2021. It’s a difficult question for several reasons.

The federally inspected slaughter for June was strong, exceeding the three previous years. More heifers and cows were in the slaughter mix in June, causing the average carcass weight to drop below the previous month’s expectations.

As reported by the U.S. Drought Monitor on May 4, 2021, 66% of the country was experiencing some level of drought, compared to just 31% the same week last year (see Figure 1).

Preliminary March 2021 federally inspected slaughter volume was up by 75,000 head from a year ago, totaling 2.95 million head, due to one extra slaughter day relative to March 2020.

Most of the U.S. beef packing infrastructure was built in the 1980s. Cattle inventories in the decade of the 1980s averaged 108.3 million head, 15% greater than the 92.1 million head average of the past decade. The industry was characterized by excess capacity for many years as cattle inventories declined.

The severe winter event in mid-February that dipped as far south as Texas disrupted packing plant operations, further-processing facilities and delivery of cattle to plants.

Much of 2020 has been preoccupied with daily and weekly slaughter numbers, carcass weights and boxed beef prices, along with monthly cattle-on-feed dynamics. The intertemporal volatility through the year adds to the challenge of assessing what, exactly, is the situation regarding the cattle cycle and longer-term herd dynamics.

Cattle supplies and movement through the supply chain have been headline topics in 2020. Disruptions caused many changes that impacted producer decisions. It is also important to occasionally take a longer-term view at cattle supplies. Recent reports released provide the most current update on the state of cattle supplies. 

Whether you subscribe to culling females using the Four O’s Cow Culling Program (culling open, old, ornery and oddball cows) or not, culled females have a profit potential you’ll want to maximize, just like when you sell your calf crop.