Beef cutout value leveling off
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.
Cash cattle are mixed this week with prices steady to $2.00 lower in the Southern U.S. and steady to higher in the North.
Estimated cattle harvest last week totaled 623,000 head, which is 38,000 head lower than the previous week. The beef cutout value has begun leveling off after losing $60.00 in the past two weeks and was quoted at $281.97 Thursday afternoon. There’s always a lag between a decrease in wholesale prices and the corresponding drop at retail. Retail features are favoring pork and chicken currently.
Carcass weights are steady at 856 pounds on beef breed steers. That’s still 21 pounds heavier than the same week in 2019.
Grains are caught up in a weather market. Rain in North Dakota and forecasted rain for parts Iowa, Illinois, and Indiana is certainly welcomed news. Any news of rain, realized or forecasted, has caused sell-offs in corn and soybean futures. That has led to volatility in feeder cattle prices, both in futures and cash.
Cash hogs trending higher
The pork cutout value has changed course and has been working higher – mostly on the strength of bellies and hams. Some of that is being attributed to demand from food service. Harvest last week was estimated at 2.282 million head, which is 77,000 head less than the previous week.
Cash hogs have been trending higher this week as well, with the U.S. average live cash price at $84.22/cwt on Thursday and cash carcass basis averaging $109.82/cwt. While harvest is running ahead of last year by 1.2 percent, average market hog weight is 276.6 pounds compared to 283 pounds the same week last year.
A tighter hog supply coupled with lighter hog weights will underpin farm gate prices for the remainder of the summer, although maintaining both domestic and export demand will also be key factors. Retail pork prices increased at a faster rate than beef, but are still attractive for price conscious shoppers.
May strong month for exports
May was a strong month for red meat exports according to the United States Meat Export Federation (USMEF). May beef export volume was a record 133,440 metric tons (mt), up 68% from a year ago, and value increased 88% to $904.3 million. This was the third consecutive monthly value record for beef exports, which had never exceeded $800 million before March 2021.
Beef export value equated to $433.18 per head in May and the January-May average was $361.29 per head, up 13%. Exports accounted for 17.6% of total May beef production.
May pork exports totaled 283,617 mt, up 16% from a year ago and the third largest on record (trailing only March 2021 and March 2020). Export value exceeded $800 million for the first time in May, climbing 31% to $813.2 million. Pork export value per head harvested averaged $77.64 in May, up 7% from a year ago.
Through May, the per-head average was $66.16. Exports accounted for 38.1% of total May pork production. May exports of U.S. lamb were the highest of the year at 1,377 mt (up 43% from a year ago), valued at $1.82 million (up 67%). Through May, exports were 53% above last year’s pace at 5,733 mt, with value increasing 16% to $7.43 million.
State market trends
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were steady. High-yielding, high-grading cattle brought 110.00 to 125.00/cwt. There were some reported highs above $126.00/cwt again. Choice and Prime Holstein steers were bringing $92.00 to $110.00/cwt.
There were some packages of Holstein steers selling from 111.00/cwt to $116.00/cwt. Silage fed, under finished or heavy dairy breed steers brought $70.00 to $95.00/cwt. Dairy x beef steers were mostly $100.00 to $118.00/cwt.
Cows were steady to $2.00/cwt higher at $40.00 to $60.00/cwt. Blemish free cows in fleshier condition were selling to the lower $70.00s/cwt. Doubtful health and thin cows were bringing $42.00/cwt and lower.
Dairy bull calves were higher this week at $40.00 to $75.00/cwt with heavier, well cared for calves up to $145.00/cwt. Beef and beef cross calves brought up to $310.00/cwt. New crop fed lambs sold to $300.00/cwt.