Demand for beef increases
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.
This is the second week of higher cash cattle after a long stretch of prices unwilling to budge. There are signs pointing to packers needing cattle to meet beef demand, and many cattle feeders are using that to hold out for higher bids.
Last week’s harvest estimate was 646,000 head, down slightly from the previous week, but about 20,000 head lower than the levels we had seen early in 2021.
The USDA released a Monthly Slaughter report on March 25. Harvest by head in February was down 2 percent compared to 2020. Heavier cattle and higher carcass weights offset lower harvest numbers making total beef production for the month just 1 percent lower than February 2020. Profitability is improving, but still hampered by higher feed costs.
The Sterling Profit Tracker reported profit margins were $66.00 per head in the black for cattle marketed last week. They calculated last week’s average beef breed fed cattle price at $115.81/cwt, the highest weekly average since May of 2020. The calculations prepared by Sterling Marketing Inc. also estimate the farmer cost to finish cattle at $1,509 per head which includes feeder cattle purchase price. The latest export report shows the weekly sales total of US raised beef was 18,700 metric tons. Japan, China, South Korea, and Canada were the lead buyers.
Plants clear backup
Slowdowns at processing facilities due to COVID 19 started in March with the first closure happening on April 6, 2020. It’s taken almost 11 months to work fully through the backup of market hogs, and nearly a full year before it brought higher prices at the farm level.
Cash hog and pork prices back this up. The pork carcass cutout value was $83.56 the end of January, $95.13 the end of February, and $108.91 the last day of March. The cash hog price on a carcass basis was $56.78/cwt on January 30, and was $96.65/cwt on March 31.
The Sterling Profit Tracker reports a profit of $66.00 per hog for farrow to finish farmers, equaling the cattle profit per head margin. Farmers still have a lot of 2020 red ink to make up for. Last week’s harvest estimate was 2.551 million hogs.
The USDA monthly Livestock Slaughter report shows total pork production down 2 percent in February compared to February 2020. Harvest on a per head basis was down 3 percent. Export sales had a big week with orders for 61,000 metric tons of US raised pork. That makes it the largest sales week of the year (and most of 2020 as well.) China, Mexico, Japan, and Canada were lead buyers.
Planting report released
The much anticipated Prospective Planting report (often referred to as the planting intensions report) was released on March 31. Wisconsin farmers intend to plant 4.15 million acres of corn for all purposes in 2021 according to the USDA, National Agricultural Statistics Service. This is up 150,000 acres from 2020.
Producers intend to plant 2.25 million acres of soybeans in Wisconsin this year. This is a 250,000 acre increase from 2020. If realized, this would be Wisconsin’s largest planted acreage on record.
Farmers in Wisconsin expect to harvest 1.20 million acres of all hay for the 2021 crop year. This is 170,000 acres fewer than 2020.
Nationally, corn planted area for all purposes in 2021 is estimated at 91.1 million acres, up less than 1% or an increase of 325,000 acres from last year. Soybean planted area for 2021 is estimated at 87.6 million acres, up 5% from last year.
State market trends
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were higher this week. High-yielding, high-grading cattle brought 98.00 to 114.00/cwt. with some groups $114.00 to $118.00/cwt. Choice and Prime Holstein steers were higher as well bringing $89.00 to $99.00/cwt.
There were reports of high-yielding, calf-fed, Holstein steers selling from $99.00/cwt to $102.00/cwt. Silage fed, under finished or heavy dairy breed steers brought $70.00 to $90.00/cwt. Dairy x Beef steers were mostly $95.00 to $107.00/cwt.
Cows were steady to higher at $47.00 to $65.00/cwt. Blemish free cows in fleshier condition were selling to the mid $70’s. Dairy breed bull calves were higher at $50.00 to $125.00/cwt with heavier, well cared for calves up to $180.00/cwt.
Beef and Beef Cross calves brought up to $285.00/cwt. Market lambs remain lightly tested. 110 to 140 pound lambs sold in a wide range, topping at $240.00/cwt for new crop lambs.