Cattle producers typically generate about one-third of their total operating capital from the sale of cull cows.  This year producers need to watch this market carefully.  Chances are that there will be considerable cow movement this fall as many producers across the entire country are faced with poor forage conditions and high hay prices.  Carolina producers have some tough decisions ahead as they approach the fall weaning and culling period.

In the fall, cattle producers wean calves and evaluate the cowherd.  Unproductive and/or unsound cows are culled from the herd.  The following graph shows the impact of cow slaughter on cow prices.  Cow prices are significantly lower in the fall than other times of the year. 

Many parts of the country have been severely hurt by drought resulting in producers having to move cows and calves earlier than normal.  Many of these cows have been, up to date, relocated to different areas of the country—staving off a price decrease usually seen when the industry faces drought.  This movement to other “greener” pastures will likely come to a close this fall.

The following graph shows the price of cows in Carolina for 2002, and the last five years.  The seasonal pattern is apparent in these prices as well.  The five-year average line shows about a $9 per cwt range between the highest and lowest prices.

It is very likely that a larger than normal culling of the cowherd will occur in 2002.  And, this increase in cow movement may mean that prices could fall faster and deeper than the seasonal patterns suggest.

What does this mean for producers?  Given, that cow prices typically declining in the fall as culling rates increase how much will cow prices decline this fall?  The normal increase in cow slaughter totals from the third quarter to the fourth quarter is about 14 percent.  A price decline of about 10 percent is associated with this supply adjustment.  Even a slight increase in cow slaughter this year will put cow prices into the mid $30’s to possibly low $30’s per cwt.

Moving cows early this year might be the best bet.  Cow prices typically move lower from mid September though November or December.  Prices have already started to drift downward this year—so it might be wise to cull earlier and minimize this price decline.

The next best alternative requires that you have excess feed on hand.  Over wintering cull cows typically rewards producers with better prices and extra weight.  As the graphs show, market cow prices improve significantly from early December to mid-March.