Market report for week of Dec. 27, 2020

Jeff Swenson
DATCP

Cash cattle saw gains the end of last week and carried strength into this week. Winter storms in parts of the Plains and Cornbelt may hinder the ability for feeders to load cattle later this week. At least one Wisconsin auction market cancelled their regular Wednesday sale due to weather. Fed cattle buyers are also looking to secure cattle for the first week of the New Year.

The USDA will release a Cattle Inventory report the end of January 2021. The nation’s beef cow herd is expected to be lower than at the beginning of 2020 as cow and heifer harvest levels indicate expansion in the sector has ended and not resumed. 

Feed costs continue to increase, but the smaller supply of feeder cattle has so far kept feeder cattle demand strong. Corn futures contracts have closed higher 11 sessions in a row through Monday. Dec. 28. 

Traders are also watching a port worker strike in Argentina. The strike has backed up grain shipments there, and could mean more US grain heading overseas.

Hogs and pigs report

The much anticipated USDA Hogs and Pigs report released on December 23 did bring news of a smaller sow herd, 3 percent smaller than a year ago to be exact, and 1 percent lower than the previous quarter.

The September through November 2020 pig crop of 35.0 million head was 1 percent lower than the same period last year. While this would make the report bullish, farrowing intentions for December through February are 1.6 percent ahead of the same comparable period the year prior. 

It will be interesting to see how this plays out between now and the next report in March. Fewer sows in inventory, but more sows farrowing than a year ago wasn’t something traders and analysts expected.

All weight classes of hogs and pigs were lower than a year ago except the 180 pounds and over category. Wisconsin followed the national trend, reporting 3 percent fewer sows than last year. Total hog inventory in the state (breeding and hogs for market combined) was 10 percent above 2019. Cash hog prices were lower at the end of last week as pork cutout values were down. 

Fresh hams were the largest drag on carcass values. Ham demand typically slumps once Christmas season needs are filled.There was some strength in cutout values early this week providing optimism for good pork demand heading into 2021.

Wisconsinites in the news

Some Wisconsinites have made national news in recent weeks. The father-son team of Reid and Matt Ludlow at Rush Creek Ranch in Viroqua was named the 2020 BEEF Magazine National Stocker Award Winner.

The Ludlows purchase light weight cattle in the Southeastern US where the calves stay for a time to be worked, comingled and grazed on rye grass. The cattle are moved to Wisconsin in late spring once pastures at the ranch can support them. The cattle are rotated through 5 acre pastures until mid-November to late December when they are sold to feedlots. The Ludlow’s typically run about 1,400 head of stocker cattle each year.

Brian Winnekins of WRDN radio in Durand was named 2020 Farm Broadcaster of the Year by the National Association of Farm Broadcasters (NAFB) during their virtual convention in November.

Brian is a familiar face at agricultural meetings and conventions. His broadcasting career began in 1989 and he began his farm broadcasting career in 1998. He purchased WRDN in 2011 and served as NAFB President in 2016. Brian is the third farm broadcaster from Wisconsin to have won the award, joining Bob Bosold (2002) and Pam Jahnke (2013.)

Beef report

High yielding Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were higher when compared to early last week, bringing $103.00 to $108.00/cwt. High-yielding cattle with an overnight stand were up to $110.00 with reports of some selling higher Tuesday ahead of the forecasted snow. Choice and Prime Holstein steers were steady to higher at $91.00 to $97.00/cwt.

Again, there were reports of some selling higher on Tuesday.  Cows were steady at $38.00 to $53.00/cwt. Blemish free cows in fleshier condition were selling from $53.00 to $65.00/cwt. Dairy breed bull calves were steady at $45.00 to $160.00/head. There wasn’t a good test on lamb prices this week.

Jeff Swenson

Market Update draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA NASS and AMS reports.