Cows at bunk.
April 15, 2020

Important to Keep Moving Cull Cows

 |  By: Jim Dickrell

Despite lower prices for cull cows as the COVID-19 pandemic impacts retail markets, it’s still important to keep cull cows moving through the system.

That’s the message a major meat packer and a livestock auction system manager in Wisconsin gave dairy farmers in a nearly hour-long webinar Wednesday sponsored by the Professional Dairy Producers of Wisconsin.

While there is still ample processing capacity for cattle in the Midwest, the concern is that a mass liquidation of cattle in a short period of time would overwhelm the system. Then, landfilling of carcasses might be the only option.

“I really don’t want to go there because it would be a waste of good food,” says Steve Van Lannen, president and CEO of the American Food Group. AFG is headquartered in Green Bay, Wis., and has plants in Wisconsin, Minnesota, South Dakota and Nebraska. The company has 6,000 employees.

Timeliness of cattle movement is important as is a constant stream of culls. “We don’t need a huge pile of cattle that need to be processed all at once,” says Curt Larson, president and CEO of the Equity Cooperative Livestock Sales Association. Equity has 11 auction markets in Wisconsin, one in Iowa and collection station in Michigan.

Larson says it is important for dairy farmers to communicate with their livestock markets. He urges farmers to check auction websites and social media for market conditions and alerts

If there were a surge in cull cow marketings, Van Lannen says the processing industry could probably handle it by moving cattle to plants with capacity. “As of now, if they were marketed in a timely manner, we could handle it,” he says. “But will [market] demand accept it? Freezers are full, so storage is not an option.”

Speaking generally, Van Lannen says slaughter plants in the Midwest are not running at capacity. Typically, 120,000 dairy cattle are processed weekly. But in the last few weeks, slaughter rates have run at about 100,000 head, taking a day of production off the schedule.

“The industry has ample capacity. [Consumer] demand is the bigger issue,” he says.

Prior to the stay-at-home orders that have been issued in most states, nearly 60% of meals were eaten away from home. That drove demand for better cuts of meat such as tenderloins and rib eyes. That market has now shrunk considerably, and a lot of meat is now being ground into hamburger. Export markets have also shriveled, mostly due to the higher value of the U.S. dollar.

This change in demand has reduced the overall value of a carcass by roughly 30%, says Van Lannen. And the value of non-meat components, much of which are exported such as offal and hides, has dropped to nothing, he says.

The good news is that retail markets have, for the most part, stabilized. We’re also entering the summer grilling season, so that should spur demand for better cuts of meat.