Dairy herd retirement coincides with beef cow culling season

By CAROL RYAN DUMAS
Capital Press

A third dairy buyout this year is weighing on the minds of beef producers who say the timing of Cooperatives Working Together's latest effort hits at their peak marketing season.

Cow-calf pairs come in off the range, calves are weaned and culls are sent to market in the fall.

"That's always the case," said Greg Doud, chief economist with National Cattlemen's Beef Association.

In addition, there's not a high demand for ground beef in the winter months and that's where the cull cows go, he said.

Dairy cows adding to slaughter will likely impact beef prices, he said. Markets during the previous two herd retirements this year bear that out.

Beef producers lost $4 to $5 a hundredweight during a three-week period in June when CWT sent cows to slaughter and $3 a cwt again in the three-week period in August when CWT sent more cows to slaughter.

"We're concerned because June isn't a high point for cull cows; they're out grazing on pasture. In August, it's kind of the same thing," Doud said. "October and November is a much more significant time period. It'll have much more impact for ranchers marketing those cull cows."

Other factors are already hitting beef producers hard. The economic downturn, decreased demand for beef and large pork supplies are already straining markets.

"When dairymen make these kinds of decisions, it has implications for our industry," he said.

Earlier this month cull cow prices are down more than 10 percent from a year ago, according to NCBA. CWT culling could add to the price decline.

"If this round of the CWT were to involve a cull of 50,000 cows in a 30-day period, it could result in a $3.00/cwt negative impact on cull cow prices," NCBA reported. "Cull cow prices could potentially struggle into 2010, depending upon the exact timing of this cull."

Dick Coon, president of the Washington Cattlemen's Association and a Benge, Wash.-based producer, on Monday, Oct. 5, sent a strongly worded letter to Jerry Kozak, president and CEO of National Milk Producers Federation.

"It is one thing to over-expand and be willing to pay the price to correct the problem, but it is unwise to unsettle and pressure an agricultural partner in the process," he stated in the letter.

Coon said in a phone interview the action by CWT makes cattle producers uncomfortable. "I'm unhappy they're doing it now, I've got a lot of cows and calves to market," he said.

CWT has already removed 226,000 head in the past year and the industry has absorbed that because beef cull has been low, he said. Culling more dairy cows now is bad timing.

"In this economy, everyone's under pressure. They certainly are entitled to their decision, but it affects other industries," Coon said.

NCBA had received an acknowledgment from dairy leaders that CWT could have an impact on beef producers and would time herd retirement as best they could. Coon took that as a promise dairymen would not have another herd retirement this fall.

"They said they weren't going to do it and they did it anyway," he said.

"Economic pressure aside, this is an alarming and unsettling move," he said in the letter to Kozak. "I sincerely hope this doesn't negatively affect long-term relations between the dairy industry and the cattlemen."

"There has not been, and there cannot be, any formal or informal agreement about the timing or size of CWT's herd removals," said Chris Galen, National Milk's vice president of communications.

He added that by the time the cows go to slaughter in the second half of November and in December, it should be after the peak beef cattle harvest season and the impact should be minimal.

An average of 3 million cattle go to slaughter each month; CWT's activities in the past 15 months are just a fraction of that total, he said.

Staff writer Carol Ryan Dumas is based in Twin Falls. E-mail: crdumas@capitalpress.com.

Online
National Cattlemen's Beef Association: www.beef.org
Washington Cattlemen's Association: www.washingtoncattlemen.org
National Milk Producers Federation: www.nmpf.org