Beef prices may back off as cattle prices increase
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.
Bids for fed cattle at auction markets this week are mostly steady. Packers weren’t chasing additional cattle in the cash market early, however. A new month means contracted cattle are going to fill some capacity this week. Last week’s harvest estimate of 651,000 was 14,000 head lower than the previous week.
Wholesale beef prices are coming down, although still higher than a year ago. The Choice carcass cutout value has been lower for four consecutive days as of September 1, as grilling season turns to tailgating and football parties. There is potential for beef prices to back off as cattle prices increase.
A disappointing August jobs report and extended unemployment benefits ending may impact beef demand. Retailers have been reluctant to feature beef as the higher cost has brought on tighter margins for them.
A recent Rabobank report says the backlog of cattle has finally been cleared and the outlook for cow calf and feedlot operators is positive. Canada reported a 1.7 percent drop in beef cow numbers, furthering evidence of lower cattle supplies ahead.
Pork prices fall
Hog supplies remain current with wholesale pork prices backing off their recent highs. The biggest weakness is bellies. Cash hogs were higher at mid-week, again pointing to tightening supplies. Sow prices remain high heading in to fall, another indicator that seasonal demand shifts are still in play.
The increase in sow prices is also attributed to higher mortality rates on the farm. Last week’s estimated harvest was 2.444 million head, just 1,000 head lower than the previous week. Canada announced it has grown its breeding herd by 1.4 percent, moving in the opposite direction as the US. Canada’s sow inventory is significantly smaller than the U.S., so the increase won’t have a large impact on the North American hog supply.
Market lamb supplies to tighten in 2022
Mature ewe harvest is running higher than last year. Similar to the increase in beef cows marketed, sheep flocks in drought stricken regions have been culling and, in some cases, liquidating. Market lamb supplies next year will certainly be tighter than current conditions. The weighted market lamb price last week was $256.37/cwt.
Much needed rain aids crops
Corn in Wisconsin is three days behind last year and six days ahead of the five-year average with 83 percent in the dough stage or beyond. Forty-six percent of Wisconsin corn is dented. Corn in the state rated good to excellent is 78 percent, three points above the previous week.
Soybeans in Wisconsin is reported at 95 percent setting pods, six days ahead of the five-year average. Soybean condition is unchanged from the previous week with 75 percent rated good to excellent.
Hay condition in Wisconsin was rated 74 percent good to excellent, one point higher than the previous week with 88 percent of third crop and 32 percent of fourth crop completed. Pasture conditions are unchanged at 61 percent rated good to excellent.
Storms brought much needed rain to parts of the country, however, flooding in some areas like Northeast Iowa caused damage to crops and pastures. Hurricane Ida challenged meat, grain, and fuel refining in the Southeast.
State auction markets remain steady
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady. High-yielding, high-grading cattle brought $108.00 to $126.00/cwt with highs to $130.00/cwt and some above. Choice and Prime Holstein steers were mostly steady, bringing $92.00 to $115.00/cwt. There were some packages of Holstein steers selling to $123.00/cwt.
Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $92.00/cwt. Dairy x beef steers were mostly $90.00 to $125.00/cwt. Cows were mixed at $39.00 to $59.00/cwt. Blemish free cows in fleshier condition were selling to the upper $70.00s/cwt. Doubtful health and thin cows were bringing $39.00/cwt and down.
Dairy breed bull calves were mixed at $30.00 to $75.00/cwt with heavier, well cared for calves up to $130.00/cwt. Beef and beef cross calves brought up to $260.00/cwt. Market lambs sold to $255.00/cwt.