Dairy cow slaughter rates are spiking amid tight farm margins and higher beef prices. USDA data shows that dairy cow slaughter for the month of June added up to 255,700 head, up 10% year-over-year to the highest level for the month since 2009. Though rates slowed slightly during the week ending July 1, declining 2.3% year-over-year, they remained above the five-year average.
One culprit behind higher rates: dwindling profits. Dairy Margin Coverage estimates by Ever.Ag Insights peg July margins at the lowest point since 2012. While feed costs are lower this year, milk prices have also declined, pressuring bottom lines.
At the same time, elevated beef prices are encouraging dairy producers to cut cow numbers. Beef choice cutout – the estimated value of a beef carcass based on prices paid for its individual parts – reached $321.97 per hundredweight during the week ending July 14. That was up nearly $55 versus the second week of July 2022.
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