Recent precipitation in the Plains States has greatly improved pasture conditions and could solidify grazing plans over the next several months. Improved pasture conditions will provide forages for the low cow inventory. As a result, fewer cows are likely to be slaughtered until fall. Improved pasture conditions will also provide a longer grazing season, allowing feeder cattle to gain weight prior to placement in feedlots. The longer pasture time will leave fewer cattle for placement in feedlots until the fall end of the grazing season. Despite issues with planting, recent precipitation will likely have a positive effect on corn and soybean yields, which could keep feed prices low through the latter part of 2015 and most of 2016. Recent storms and flooding have impacted both Texas and Oklahoma. The ground in many regions is reported to be completely saturated; with lakes and reservoirs having reached their capacities. The weekly summary of the National Agricultural Statistics Service’s State Crop Progress and Condition report for May 25-31, (http://www.nass.usda.gov/Publications/State_Crop_Progress_and_Condition/) reported that Texas received upwards of 10 inches of rain and Oklahoma chalked up the wettest May since 1921. The June 2, 2015, U.S. Drought Monitor showed drought intensity in Texas and Oklahoma reduced to D0 (“Abnormally Dry”) compared with earlier weeks showing the same regions with D3 (“Extreme Drought” levels) (http://droughtmonitor.unl.edu/). As a result of the recent storms, the Southern Plains pasture conditions are improving and plantings have been interrupted or delayed, while hay that has been cut but not yet baled is likely to be of poor quality. California and parts of the West remain in one of their worst droughts.
Reduced Slaughter Exacerbated by Cow and Heifer Retention
Cattle producers are culling fewer cows due to the improved pasture prospects for this spring and the early part of the summer. This likely means fewer cows will be going to slaughter until the fall culling season. The paucity of cows for slaughter this spring, summer, and early fall will likely have implications for supplies of processing beef and ground beef production through summer 2015. First-half 2015 cow slaughter could be down 6 percent over first-half 2014, following a steeper 13- percent decline for 2014 over 2013. Reduced cow slaughter will likely support demand for imported processing beef. Heifers will also be more likely to be retained for breeding due to improvements in pasture conditions, which will leave feeder cattle in even shorter supply for placement on feed later.
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Source: USDA