Cold weather pushes prices higher at auction markets
Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The 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.
Cattle at Wisconsin and surrounding state auction markets are higher this week. The cold temperatures in the northern states are causing lighter runs at markets and are at least partially responsible for higher prices. Winter storms in the Plains will also hamper cattle movement and hinder feedlot performance.
The average carcass weight of beef breed steers nationally was 892.8 pounds on the latest report and while that’s three pounds below the previous week, it’s still 14 pounds heavier than a year ago. Last week’s harvest was estimated at 653,000 head. Early numbers indicate this week’s harvest will be below last week’s numbers, but will likely still be ahead of the same week a year ago.
Export sales for US beef totaled 17,500 metric tons according to the last report. Exports were lower than the previous week of 29,900 metric tons, but equal to the same week a year ago. According to the Sterling Profit Tracker, cattle feeders lost $25.00 per head on cattle marketed the week ending February 5.
China remains lead buyer
Cash hogs were higher again last week but did soften late this week. Last week’s harvest was estimated at 2.691 million head. Weather could slow hog movement hampering efforts to keep hogs current in the short term.
Total weekly export sales were 36,900 metric tons according to the latest report with China being the lead buyer. The National Pork Board held another U.S. Pork Exports and Market Update webinar on Tuesday February 9, and speaker Brett Stuart with Global AgriTrends put China’s 2020 purchases in perspective by saying 28 percent of all US pork exports went to China last year. Pork prices in China continue to be high with their carcass price being the equivalent of $2.85 per pound in US currency.
Even with the ongoing 25 percent tariff on US pork, it’s still an attractive purchase. As the Chinese Year of the Rat turns to the Year of the Ox, the country will likely be out of the global market next week while businesses are shut down for the celebration.
WASDE report moves markets
The USDA released a World Supply and Demand Estimate (WASDE) report on Tuesday, February 9. The U.S. corn and soybean ending stocks are not tightening as much as expected. While projected ending stocks of corn was adjusted lower (1.5 billion bushels, down from a forecast of 1.55 billion last month) it’s still higher than the average trade estimate of 1.38 billion bushels.
Corn futures contracts began trading lower on the news. The March contract came off of what was a seven year high prior to the report. In its report, the USDA pegged the world’s 2020/21 corn ending stocks at 286.5 million metric tons vs. trade’s expectation of 279.79 million metric tons. There are expectations that the South and Central America crops will be larger than earlier expected.
Retail prices strong
Domestic demand for beef and pork continues to be strong as retail purchases have offset the loss in foodservice sales. Retail demand for lamb took some extra time to develop compared to most other red meats when COVID 19 changed buying habits.
Meal fatigue is being credited for a currently 20 percent increase in lamb purchases by volume. With some consumers having more time at home and a desire for more diversity in their meals, lamb is becoming more popular among home chefs. The trend has also caused an increase in internet searches for lamb recipes.
State auction markets
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were higher bringing $100.00 to $110.00/cwt for grain fed cattle likely to grade Choice or above. High-yielding, high-grading cattle with an overnight stand sold up to $114.00 /cwt with a smattering above. Choice and Prime Holstein steers were higher at $89.00 to $98.00/cwt. There were several reports of high-yielding, calf-fed, Holstein steers with an overnight stand selling above $100.00/cwt.
Dairy x Beef steers were mostly $92.00 to $102.00/cwt. Cows were higher at $45.00 to $65.00/cwt. Blemish free cows in fleshier condition were selling into the low 70’s. Dairy breed bull calves were mostly lower $40.00 to $80.00/head with heavier, well cared for calves bringing $80.00 to $130.00. Beef and Beef Cross calves brought up to $265.00/cwt.
Market lambs remain lightly tested with the best cut of lambs 110 to 140 pounds topping in a range of $160.00 to $195.00/cwt for new crop. Old crop lambs sold in a wide range with the high at $160.00.