L.M.I.C. data indicates increased dairy cow slaughter

by Bryan Salvage
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WASHINGTON — According to the Livestock Marketing Information Center, Denver, Colo., weekly dairy-cow slaughter since the beginning of 2009 has been well above year-ago totals because dairy producers faced with low milk prices were forced to shrink their herds. Year-to-date dairy cow slaughter at the end of February was approximately 509,000 head.

Compared to last year, that represents a 26% increase or about 100,000 head more than last year, according to the L.M.I.C.

U.S. federally inspected cow slaughter in 2008 was the largest since 1997, thus 2009 could be the largest cow-slaughter year in more than a decade. The increased dairy-cow slaughter numbers has contributed to significant year-to-year declines in cull cow prices in recent months. Federally inspected dairy-cow slaughter in 2008 averaged about 4% higher than 2007’s, with dairy-cow slaughter levels increasing towards the end of the year as milk product prices began to fall.

Given the large financial losses being suffered by dairy operations, producers will continue to aggressively reduce cow numbers this year. L.M.I.C. estimates suggest a contraction in the number of U.S. dairy cows of just more than 300,000 head should boost milk prices to near breakeven levels for dairy producers (current milk prices are $4 to $5 per cwt below cost of production).

Both beef and dairy producers need to keep an eye on dairy-cow slaughter as they develop marketing plans for their non-productive cows. Due to the larger number of dairy cows in the slaughter mix so far this year and forecasted for the year, L.M.I.C. predicts cow-slaughter levels for calendar year 2009 to exceed the previous. 

The L.M.I.C. (www.lmic.info) has provided economic analysis and market projections concerning the livestock industry since 1955.

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