Market Impacts of Carcass Size
Bridger Feuz, UW Extension Livestock Marketing Specialist
Over the last month there has been quite a bit of information coming out regarding the impacts of heavy carcass weights on the cattle market. Dr. Derrell Peel of Oklahoma State University has really led the charge on understanding these impacts. This reminded me of a project I worked on about five years ago looking at carcass size trends and potential future implications.
Dr. Peel noted earlier this month that there was a large supply of extremely heavy fed cattle, and this was one of the factors contributing to falling calf prices. He also noted that there were anecdotal reports of fed cattle in the Midwest with live weights up to 1,900 pounds. Estimated cattle carcass weights were at 843 pounds, up 25 pounds over the same week the year prior. The extra carcass weight is equivalent to adding over 17,500 head to the weekly slaughter total at last year’s carcass weights. This fact can’t be ignored as the industry is currently in a herd-rebuilding phase.
Over the last month many of these extremely heavy weight cattle have been marketed, and we have subsequently seen a rebound in calf prices. If we continue to work through the heavy cattle this could set us up for a nice price rebound in November and December of this year.
About five years ago I asked three students, Wyatt Feuz, Jemini Leckie and Caitlyn Jackson, to analyze steer carcass weights. Their charge was to look at steer carcass weights from 1960-2010 and fit an equation to the data. They were then asked to use their equation to predict carcass weights out to the year 2050.
The result of the project was that, based on the equation that best fit the data, steer carcass weights would be 1,035 pounds by 2050. I wrote an article on this subject back in 2011 and shared it with many producers during presentations that year. The reaction to my article and the presentations were generally uniform in that producers were not convinced they would ever see steer carcass weights at 1,035 pounds.
So what has happened since 2010? Well, if the anecdotal reports coming out of the Midwest earlier this month are true and steers were marketed with live weights up to 1,900 pounds, we are already there. A 1,900-pound live weight steer would have a carcass weight at or above 1,035 pounds. I understand this is not an average weight and we were under some unique circumstances, but I thought I would take a look back at the original project predictions and compare that to actual averages over the last five years.
The table above depicts changes in the last five years. The solid line represents the predictive equation based on 1960-2010 carcass weights. The second set of data is the actual average steer carcass weights for 2011-15.
The important take home message is that in each of the last five years, the actual steer carcass weights have been greater than the predicted carcass weights. Does this mean that the students were right and we will see average steer carcass weights of 1,035 pounds by 2050? Not necessarily, but it does tell us that we are still on track for that result. The 2015 average steer carcass weight through September was 883 pounds.
As the industry begins to rebuild the cowherd, it will be important for producers to keep an eye on beef production. Certainly we will not be able to return to historically high cowherd numbers with any level of profit. We continue to produce more pounds of beef per cow each year and are constricted by that fact when it comes to overall cow numbers.
Only time will tell what the per cow production capabilities will be in 2050, but so far we continue to be extremely proficient at producing more beef per cow each year.