Cyberattack and weather dominates conversations
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.
A cyberattack and weather dominated agricultural conversations this week. The ransomware attack on JBS caused the closure of nine establishments, but the stoppages were short-lived with those facilities back online and working toward pre-attack capacity. The company announced less than one workday was lost due to the attack, and will be made up by the end of next week.
Cash cattle nationally were called mostly steady this week, with auction markets in Wisconsin and surrounding states also mostly steady. Futures contracts were sharply lower after the JBS news broke, but have since corrected.
Dry conditions are spreading in Wisconsin. Some drought-stricken parts of the nation saw relief recently in the way of rain and cooler temperatures, but will face high heat during the next week.
The 10 day forecast is for hot, dry weather in many parts of the US, Wisconsin included. It’s the part of the growing season when weather events, forecasts and speculation causes volatility in grain markets and we are seeing that now at the Board of Trade. Wisconsin corn is 95 percent planted with 77 percent emerged and 81 percent rated good to excellent. Soybeans in the state are 91 percent planted.
Cash cattle prices hold steady
Cash cattle prices held steady this week, amid concerns regarding the JBS ransomware attack which is estimated to cause a 40,000 head reduction in cattle harvest this week. Harvest overall has been lagging all spring.
This week’s Wednesday total was 105,000 head, while totals closer to 122,000 daily would be more helpful to close the gap between supply and demand. Last week’s harvest total of 629,000 was 40,000 head below the previous week. Wholesale beef prices continue to increase with Thursday’s cutout value at $340.55. This compares to $296.50 at the beginning of May. Beef prices will likely work higher as some retailers are shorted on orders in the near term.
Beef exports for the most recent week was 12,600 metric tons. While not a huge buyer this week, China has been purchasing about a third of US beef exports in recently.
Lean hog futures reach highs
Lean Hog futures have reached contract highs. With a short breather early in the week, they continued to charge higher on Thursday. Cash hog prices were mixed from day to day this week, yet will finish the week higher than last Friday. The average cash price was $83.81/cwt Thursday with the carcass basis $108.45 /cwt.
Iowa/Minnesota harvest weights are now running two pounds below the five year average. Weights were seven pounds heavier than the average at the beginning of the year. Estimated harvest last week was 2.378 million head.
As wholesale and retail pork prices continue to increase, it’s still attractive to many shoppers relative to beef prices. Mexico has been a great pork customer in recent weeks as sales to China taper off. The most recent export sales report total was 24,300 metric tons. China’s domestic wholesale pork price is about half what it was this time last year, indicating their pork production is growing.
Beef markets hold the line
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were steady. High-yielding, high-grading cattle brought 102.00 to 119.00/cwt. with groups bringing $120.00 $125.00/cwt. Choice and Prime Holstein steers were steady bringing $92.00 to $104.00/cwt. There were some packages of Holstein steers selling up to $107.00/cwt.
Silage fed, under finished or heavy dairy breed steers brought $70.00 to $98.00/cwt. Dairy x Beef steers were mostly $88.00 to $1156.00/cwt.
Cows were steady to $1.00 lower at $45.00 to $63.00/cwt. Blemish free cows in fleshier condition were selling to $73.00/cwt. Doubtful health and thin cows were bringing $45.00/cwt and down.
Dairy breed bull calves were lower $45.00 to $95.00/cwt with heavier, well cared for calves up to $170.00/cwt. Beef and Beef Cross calves brought up to $325.00/cwt. Feeder cattle demand is still strong with lighter-weight dairy steers still under pressure. New crop fed lambs sold to $225.00/cwt.d