More Dairy Cows Are Heading to Slaughter; It Will Be Awhile Before the Beef Herd Expands

The latest USDA Livestock Slaughter report shows dairy producers are sending more cows to town than in the past. Also, the drought in the High Plains is probably going to keep the beef herd from expanding (amongst other things). We wrap up with a look at consumer confidence. 

Transcript

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Hello everybody, welcome to Chat B DC. Today's Wednesday, April 29th. We've got our three articles queued up for today. We're gonna talk about dairy cow slaughter. We're gonna take a look at uh drought conditions for pastures for beef cattle, and then a look at consumer confidence. So let's get to it. After a steady decline in cow slaughter, dairy producers are starting to see a shift in culling decisions. High cost of replacement heifers has made it difficult to justify culling cows. That trend is changing according to recent numbers. Based on the latest USDA monthly livestock slaughter data released last week, the number of dairy called cows marketed through U.S. slaughter plants in March is estimated at just under 240,000 head. That's up almost 2,000 head from February. It was also 21,000 plus more than March 2025. Weekly slaughter toward the end of 25 reversed a long-term trend where weekly dairy cow slaughter had trailed year-earlier levels. The total decline of nearly 556,000 head. However, in the weeks since September of last year, it's increased almost 75,000 head from the same period a year earlier. USDA estimated there were 9.621 million dairy cows in U.S. herds in March 2026, which was up 8,000 from February, putting the March culling rate at about 2.5% of the herd. Based on the monthly data, year-to-date dairy culled cow slaughter now stands at about 723,000 head, which is up 40,000, just over 40,000 from the same period a year ago. So more cows are headed to town than in the past. Moving over to cattle markets, the formula for herd expansion may be simple, which is grass plus profitability equals more cattle. But the reality on the ground is anything but that. In an article on drovers.com, Cattlefax analyst Holden Raimi says nearly three-quarters of the U.S. beef cow herd is currently in drought, which is sharply limiting the industry's ability to rebuild numbers. While profitability signals are strong, Remy says dry pastures, high interest rates, costly inputs, and market volatility are forcing many ranchers to delay or scale back heifer retention. He says that they're seeing some retention on a limited basis, but it's pretty slow, and the rebuild is cautious and not really a full throttle expansion. Remy shared an outlook on the U.S. beef cattle cycle, herd dynamics, feed and grain markets, drought impacts, trade, demand, and price expectations across the cattle and beef complex during a symposium last week. His core message was supplies will stay historically tight, demand is still exceptionally strong, expansion will be slow and cautious, and effective risk management is critical, especially if producers want to take advantage of prices of where they're at. If you want the full seven key takeaways from Raimi's presentation, I would suggest you check out the article on drovers.com. Checking out financial markets, American consumers turned more positive about the future course of the economy in April as people enjoyed their tax refunds and a temporary ceasefire between the U.S. and Iran. Conference Board's Consumer Confidence Index released on Tuesday rose by 0.6% in April.3%. The expectations index, how consumers see the short-term outlook increased by 1.2 points. One analyst said that while consumer confidence edged up in April, overall little has changed despite material concern about rising gas prices. Among demographic groups, confidence continued to trend downward on a six-month basis for Americans 35 and older, while younger consumers were a tad more confident in April. Respondents under 35 remained the most optimistic in those 55 and over the least. Most income groups expressed less optimism, with Republicans the most optimistic, while confidence fell for independence and improved slightly for Democrats. Comments about prices, oil and gas, and war increased in frequency compared to March, likely reaction to the conflict in the Middle East that has driven oil prices up sharply. On a positive note, inflation expectations for 12 months out edged downward but continued to be elevated. Well, that's all for now. As always, thanks for tuning in to ChatBDC. You guys know the drill. If you find it useful, subscribe, share, tell everyone about it. I'll be back tomorrow with more business news across the Megan Financial Markets, and then I might open the video.