The impact of dressing percent on cull cow marketing
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Last week’s Cow-Calf Corner newsletter discussed cull cow grades. Remember cull cows that are destined to go to the packing house are graded by their fleshiness. The fattest cows are called breakers, moderately-fleshed cows are boning uitility, and thin cows are called leans or lights, depending upon the weight of the cow. There will be price differences among these four grades.
However, within each grade, large variation in prices per hundredweight will exist because of differences in dressing percentage. Cow buyers are particularly aware of the proportion of the purchased live weight that eventually becomes saleable product hanging on the rail. Dressing percentage is (mathematically) the carcass weight divided by the live weight multiplied by 100.
Key factors that affect dressing percentage include gut fill, udder size, mud and manure on the hide, excess leather on the body, and anything else that contributes to the live weight but will not add to the carcass weight. Obviously, pregnancy will dramatically lower dressing percentage due the weight of the fetus, fluids, and membranes that will not be on the hanging carcass. Most USDA Market News reports for cull cows will give price ranges for High, Average, and Low Dressing Percentages for each of the previous mentioned grades. As you study these price reports, note that the differences between High and Low Dressing cows and bulls will generally be greater than differences between grades.
Many reports will indicate that Low Dressing cows will be discounted up to $8 to $12 per hundredweight compared to High Dressing cows and will be discounted $5 to $7 per hundredweight compared to Average Dressing cows. These price differences are usually widest for the thinner cow grades (leans and lights). See examples from last week’s sale in the Oklahoma City National Stockyards at http://www.ams.usda.gov/mnreports/ko_ls151.txt
As producers market cull cows and bulls, they should be cautious about selling cattle with excess fill. The large discounts due to low dressing percent often will more than offset any advantage from the added weight.
U.S. and global beef trade update
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
U.S. beef trade continued the impressive performance of recent months in the latest monthly trade data for August. Total monthly U.S. beef exports were up 9.0 percent with a year to date total up 14.2 percent year over year. For the year to date, Japan has a 28.8 percent share of U.S. beef exports followed by South Korea at 20.6 percent. Number three market Mexico has a year to date share of 14.1 percent; followed by Canada at 9.7 percent and Hong Kong at 8.9 percent. Taiwan accounts for 5.7 percent of total beef exports. Unsurprisingly, fledgling U.S. beef exports to China have faltered with the trade war. U.S. beef exports to China in August were down from the prior month and represented 0.47 percent of August U.S. beef exports. Monthly beef exports to China have decreased 47.5 percent since the pre-tariff May peak.
Total U.S beef imports were down 3.4 percent year over year in August and are unchanged for the year to date in 2018. Canada represents the largest share of U.S. beef imports at 24.9 percent for the first eight months of the year followed by New Zealand with a 23.3 percent share; Australia with a 21.4 percent share; and Mexico at 16.2 percent of total U.S. beef imports for the year to date.
USDA’s Foreign Agricultural Service released the bi-annual Livestock and Poultry: World Markets and Trade report last week with 2019 forecasts for beef production, consumption and trade among major global participants in those markets. Overall, global beef production is forecast to increase slightly in 2019, while beef exports are essentially unchanged. Beef imports among major importing countries are forecast to increase three to four percent in 2019. The top five beef producing countries are the U.S.; Brazil; European Union; China and India. Major beef exporting countries include Brazil at number one; followed by India; Australia; U.S.; and New Zealand. The U.S. remains the top beef importing country; followed by China; Japan; Hong Kong; and South Korea.
Brazil beef exports are projected to increase nearly five percent year over year in 2019; putting Brazil solidly back on top as the leading global beef exporting country. Meanwhile, India, which exceeded Brazil as the largest beef exporter in 2014-2016, declined in 2018 year over year and is projected to decline again in 2019. Australia, which has struggled to recover from earlier drought, is in drought once again and is forecast to see year over year declines in beef exports in 2019. U.S. beef exports are forecast to show modest growth year over year in 2019.
U.S. beef imports have changed little since 2016 though USDA forecasts show a slight increase in U.S. beef imports in 2019. Other analysts forecast little change or even a slight decline in U.S. beef imports in 2019. Number two beef importer China continues to increase year over year and is closing the gap with the U.S. China could be the largest beef importing country in 2020 or even in 2019 if U.S. beef imports decline and China reaches or exceeds current forecasts. Japan, Hong Kong and South Korea are all projected to increase beef imports in 2019.