2023 Cattle Markets: The Year so far and the Second Half Ahead

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

 

The first half of 2023 has certainly seen significant changes in cattle and beef markets. Prices are higher across the board as tighter cattle numbers and declining beef supplies push markets towards or beyond record levels. Remaining drought areas in the central and southern plains continue to shrink with continuing impacts on the regions but less impact nationally on cattle markets.

 

Beef production in the first 24 weeks of the year is down 4.9 percent from the 2022 record pace. In the last four weeks of data, beef production is down 5.3 percent year over year. Yearling (steer + heifer) slaughter is down 3.0 percent year over year so far in 2023, with steer slaughter down 4.7 percent for the year to date and heifer slaughter down 0.4 percent so far this year. However, heifer slaughter is down 4.9 percent year over year in the last four weeks and combines with a 5.9 percent decrease in steers slaughter to reduce total yearling slaughter 5.5 percent in the most recent four weeks of data. Total cow slaughter is down 4.4 percent for the year to date with a 12.1 percent year over year decrease in beef cow slaughter partially offset by a 5.5 percent year to date increase in dairy cow slaughter. Bull slaughter is down 8.4 percent thus far in 2023.

 

Oklahoma auction prices for steer calves under 600 pounds have averaged 41.9 percent higher year over year in June. Feeder steers over 600 pounds have averaged 39.7 percent higher compared to the same four weeks one year ago. The five-market fed cattle price has averaged 30.3 percent higher year over year in the past four weeks. The June cattle on feed report showed that feedlot inventories have been lower for nine consecutive months. The June 1 feedlot inventory was 11.55 million head, down 2.9 percent year over year. The decline in feedlot inventory has been relatively slow with May feedlot placements higher than expected based on lingering drought impacts and strong feeder demand as feedlots attempt to maintain inventories. However, feeder supplies and feedlot numbers will continue to decline as the reality of smaller cattle supplies builds. Increased heifer retention is likely to squeeze feeder supplies more sharply in the second half of the year.

 

Boxed beef prices in the last four weeks have averaged 24.1 percent higher year over year. Boxed beef prices moved sharply higher after Memorial Day by mid-June with strong buying for the Independence Day holiday. The follow up to July 4 (a four-day weekend for many) will provide good indications for beef demand for the remainder of summer. It is typical for beef demand to experience a slow-down during the summer doldrums, but overall beef demand remains robust.

 

The biggest question for the second half of the year is the extent to which herd rebuilding begins with increased heifer retention and continued reductions in cow slaughter. Producer expectations and remaining drought conditions will impact the timing of herd rebuilding efforts. The upcoming July Cattle on Feed report (with quarterly steer and heifer feedlot inventories) and the July Cattle report are expected to provide important clues as to how cattle market conditions may change in the second half of the year.

 

Historical Review of the U.S. Beef Cattle Industry - Part 2 - The Modern Industry

Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist

 

During the first half of the 20th century a selection trend developed and then intensified toward earlier maturing, smaller framed cattle. In the 1950s, surplus feed grains and consumer demand for grain finished beef led to the advent of the commercial feedlot. "Snorter Dwarfism" was reported in 1951, which is believed to have been the result of intense selection for extremely small frame cattle. By the 1960s the U.S. was primarily populated by Angus, Hereford and Shorthorn cattle of the small framed, "comprest" variety. Crossbreeding was considered sacrilegious by many cattle breeders. The modern feedlot industry was expanding in response to cheap feed and consumer demand for grain finished beef. The industry was searching for cattle that could be pushed to heavier finished weights without becoming over fat. The carcass yield grading system was adopted in 1965. Charolais cattle had been imported from Mexico in 1936, but the feedlot performance of the Charolais crossbred steer in the 1960s created an awareness of the lean growth potential offered by the Continental European breeds. Simmental cattle were reintroduced, the Limousin breed was imported and a "breeds revolutions" started that would see dozens of breeds imported to the U.S. over the next 15 years. By the end of the 1960s cattle breeders, in all breeds, were selecting for larger framed, leaner, later maturing type. In the 1970s crossbreeding became widespread practice in the commercial cow-calf industry. Intense selection for larger type would continue into the late 1980s.

 

Genetic Improvement

The establishment of the Beef Improvement Federation in 1968 led to standardized performance measures, defined contemporary groups, more extensive record keeping and eventually, the prediction of genetic values. By the 1970s all breed associations started to establish data bases and artificial insemination became more widely utilized in the purebred sector. The first National Sire Summary was published by the American Simmental Association. By the end of the 1980s all major beef breeds were publishing annual sire summaries. Genetic prediction consisted primarily of four basic EPDs: Birth Weight, Weaning Weight, Yearling Weight and Maternal Milk.

 

By the end of the 20th century the "breeds revolution" had long been over. Many breeds had lost their identity and/or popularity. The "on-foot" type of all beef breeds was becoming more homogenous. The type of cattle selected for were moderate framed with excellent growth as a result of the selection trend for more muscle and body volume. Successful breeds and purebred seedstock operations capturing the most market share were not only selling cattle but also information about the cattle. Cattle with more documented and better information had more value. The value of purebred cattle was driven by the three criteria: Performance, Pedigree and Visual appraisal of "on foot" type. Over the past 20 years, we have went from publishing hard copies of Sire Summaries once or twice annually to the current capability of generating updated EPDs on a weekly basis. Genetic prediction now consist of approximately 20 trait specific EPDs as well as several selection indices (or $Values).

 

Reviewing genetic trend information of virtually each breed indicates breeders have been highly successful in putting more sharp angles into the sigmoidal growth curve. Specifically, keeping birth weights down while improving weaning and yearling weights. As well, high heritability carcass traits (Marbling and Ribeye size) have shown a dramatic increase. Improved beef carcass quality attributes, specifically marbling, have been focused on to promote satisfaction in the beef eating experience. The quality of beef has significantly improved over the past two decades.

 

What is there to learn from this historical review? The beef industry has changed, is changing and will continue to change. Identifying emerging trends, understanding consumer demand, using technology to improve efficiency and keeping your cattle genetically relevant all will be important to the future financial success of your operation.

 

Interstate Movement of Animals and Livestock Checkpoints

Dr. Rosslyn Biggs, OSU College of Veterinary Medicine Extension Beef Cattle Veterinarian

 

Interstate movement requirements of animals, especially livestock, vary according to the state of destination. These requirements have existed for years to facilitate trade and prevent the spread of disease. Requirements are enforced by states in different manners including checkpoints at state borders.

 

Owners should always confirm requirements and coordinate with their veterinarian well in advance of shipment as inspection, testing, vaccination, and identification of the animals may be required. In most cases a certificate of veterinary inspection (CVI), commonly called a health certificate, must be issued by a veterinarian that is licensed and USDA accredited documenting the animals meets entry requirements.

 

CVIs must be accurately completed and issued by a veterinarian within the appropriate time frame according to the state of destination entry requirements. Entry requirements do change especially if a disease outbreak occurs so animal owners and veterinarians must check entry requirements prior to each individual shipment. In general, any animal that is affected, exposed, or quarantined for an infectious, contagious, or communicable disease may not be issued a CVI for movement.

 

The Texas Animal Health Commission (TAHC) has recently reestablished livestock checkpoints along state lines including the Oklahoma-Texas border. All livestock conveyances must stop whether they are loaded or empty. Entry requirements and associated documents are being reviewed at these checkpoints.

 

Entry requirements may vary according to the purpose of movement and some exceptions may exist. For instance, for Texas livestock coming into Oklahoma to a veterinary clinic for services or care, a CVI or permit is not required to go back to Texas. It is recommended that the animal owner have documentation of the veterinary visit if requested at the checkpoint upon return to Texas.

 

Currently for Oklahoma livestock going to a Texas veterinary clinic for services or care, a CVI is not required, but producers must call TAHC for a permit to be provided at the inspection checkpoint.

 

A good resource to review entry requirements can be found at the Interstate Livestock website. It is recommended that producers and their veterinarians also contact the state of destination in the event entry requirements have changed and websites have not been updated, such as during a disease outbreak.