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Cow culling at three-decade high; additional sales requirements coming

Progressive Dairyman Editor Dave Natzke Published on 27 November 2018

Finding and keeping a milk market has become less certain for dairy producers. Now, with culling at a record pace, farmers selling cows and other dairy-beef cattle for slaughter could face additional challenges as well.

Livestock marketing organizations in Wisconsin and elsewhere say major cattle buyers will require sellers to be certified through the Beef Quality Assurance (BQA) or FARM programs as early as the new year.

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Both Equity Cooperative Livestock Sales Association and Milwaukee Stockyards posted notices on their websites, informing sellers they must be certified through the BQA or FARM program to receive bids on cattle from two major companies. Tyson Foods will implement the requirement effective Jan. 1, 2019; JBS Packerland will implement the requirement a year later, on Jan. 1, 2020. The requirement is to be implemented in all auction markets and all private-treaty transactions.

According to Equity, with 14 livestock auction sites in Wisconsin, auctioneers will be required to announce seller certification at the time of sale to receive bids from the two companies. BQA certification can be achieved by logging in on the BQA website and signing up for one of the free courses which best fit a particular operation. Upon gaining certification, producers are asked to provide Equity auction markets with a form with the farm/seller name, address, phone number, certification number and expiration date.

Milwaukee Stockyards will host a BQA workshop on Dec. 7.

Check your local auction market for details.

Year-to-date dairy cow slaughter highest in three decades

Federally inspected milk cow slaughter was estimated at 288,200 head in October, the highest monthly U.S. total since January 2018. The monthly total pushed year-to-date dairy cull cow slaughter to more than 2.62 million head, according to the USDA’s Livestock Slaughter report, released Nov. 21.

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January-October 2018 dairy cow culling was higher only once in more than three decades – in 1986, during the whole-herd buyout program. Through the first 10 months of 2018, the culling total is about 126,400 head more than the same period a year ago.

With two more weekdays/Saturday than September 2018, the October 2018 total was up 40,800 head from the previous month. October 2018 also had one more weekday compared to October 2017, and slaughter was up 27,200 head compared to a year earlier.

The USDA’s latest Milk Production report indicated there were 9.365 million cows in U.S. dairy herd in October 2018. Based on the slaughter estimates, about 3.1 percent of the herd was culled during the month. Cow culling so far in 2018 has averaged about 10,700 head per day (including weekdays and Saturdays), up about 500 head per day from a year ago.

Cull cow prices, outlook weaken

Progressive Dairyman has heard of some extremely low prices for cull dairy cows, some as low as $10 per hundredweight (cwt). A review of Wisconsin auction markets reflected those reports.

The final two months of the year are always a low point for cull cow prices, as open beef cows head to market. This year, heavy dairy cull cows slaughter amid large supplies of beef in storage are compounding the trend.

As of Nov. 19, the bottom 20 percent of cull cows sold at Wisconsin auctions were bringing $27 per cwt or less, with the top 20 percent bringing $38 per cwt or more. That leaves about 60 percent of all cull cows selling in the $28 to $37 per cwt range.

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The USDA’s latest Livestock, Dairy and Poultry Outlook forecast weaker national average cutter cow prices through the fourth quarter of 2018, with only modest recovery in 2019. After averaging about $61.50 per cwt in the first half of 2018, third-quarter prices dipped to $57.74 per cwt and are expected to weaken further in the fourth quarter, with the average falling in a range of $49 to $53 per cwt. Full-year 2019 USDA price projections put the average at about $59 per cwt.

Cull cow prices (beef and dairy) averaged $108 and $104 per cwt in 2013 and 2014, respectively.  end mark

Dave Natzke
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