The volume of premium white cows—i.e., cull cows that were put back on feed and fed a high concentrate diet to add white fat to the carcass—has been on the rise. Feeding cows can be a profitable undertaking when the economics make sense, but the conditions have to be close to perfect as the margins are slim.
Since November 2019 the weekly volume of premium whites has risen to over 3,000 head a week. The weekly average in 2018 and 2019 for the whole year was under 2,500 head. In the opening weeks of 2020 that volume has climbed to over 4,000 head, and for the first nine weeks of the year the weekly average has been 4,689 head.
One of the drivers to this market has been the low cull cow values coupled with reasonable feed costs. Cull cows are sold at lower quality grades, and those prices have been somewhat depressed for the last two years. Premium white prices have been above a year ago since the summer of 2019, offering an incentive to capitalize on this unique niche market.
Fed cows that enter this category are typically fed 60-90 days, making it a tight window. One of the challenges is that cost of gain can be high because of the volume of dry matter required per pound of gain. The product that results is often featured on inexpensive buffets, and steak joints that feature a tickler price such as “$5.99 prime rib dinner.”
Those able to deal with the low feed conversion have found themselves averaging prices 15 percent higher than last year. Premium whites last week sold at a dressed weight nationally of $132.53 per cwt. Weights too have been creeping up. This year premium whites are weighing in at 840 pounds, compared to 835 pounds the year before and 816 pound in 2018. Recently, that equated to over $1,100 per cow, only $370 under what a heifer sold on a dressed basis brought in the 5-Area last week.
Compared to other cull cow dressed prices, nationally premium weights are about $10 per cwt over breakers (75 percent lean), $10-$8 per cwt over boners (85 percent lean), $7-9 per cwt over cutters (90 percent lean). There is significant divergence between the cows in other quality grades compared to the premium whites and the products they produce. The 90 percent lean product is primarily derived from cutter cows. Higher volumes of beef cows are entering the slaughter channel which could explain the availability of premium whites.
It appears that profitability of feeding cull cows is penciling out for now, but coronavirus spread poses an enormous threat to food service traffic which would disproportionately impact this market. Most of the meat produced by these types of fed cows is served in the food service sector. Massive outbreaks in the U.S. could hit the premium white fed cow category fairly hard and with high levels of beef production across the sector, that product will be difficult to move through other market channels. — Katelyn McCullock, Livestock Marketing Information Center director
