Cash cattle prices fall as week goes on
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 started the week steady, but were lower by Thursday, albeit on a light test late week. Cattle, both cash and futures, continue to be stuck in a range.
Domestic demand for beef is still strong, although there are indications that seasonal demand changes are occurring – something that we didn’t necessarily see last year. What many call the summer doldrums or the “dog days of summer” will typically bring a decrease in whole muscle cut (steak) demand.
The product price is under pressure with the Choice beef cutout Wednesday afternoon at $269.87. The latest weekly export data reports orders for 9,300 metric tons of US raised beef. That was disappointing after the prior week’s total of 23,700 metric tons.
Last week’s harvest estimate was 582,000 head. Sustained weekly harvest totals of 650,000 head or more coupled with an expected tightening of fed cattle supplies would give strength to cash, which would lead the futures higher.
Pork market finds strength
The pork market has found strength with both cash and futures stabilizing and product value higher this week. Market weights have consistently been lighter, indicating market hogs are not just current, but being pulled ahead. Last week’s estimated harvest was 1.923 million head.
It’s unlikely pork production will increase in the coming months, but any further upside in price will likely depend on larger export sales. Export sales according to the latest weekly data was 10,600 metric tons, down from 43,800 the week before.
China was not a buyer according to the report. Even with decreasing pork prices in China and a reported 36 percent increase in pork production the first half of this year there, they will still need to rely on least some imported pork to meet demand.
Consumer Price Index up
The Consumer Price Index (CPI) rose 5.4 percent in June compared to the same month last year. Excluding food and energy the CPI was 4.5 percent higher in June.
The average retail beef price in June was $7.11/pound, up from $6.73/pound in May. Pork averaged $4.55/pound in June, up from $4.38 in May. The average retail for chicken was $2.06/pound in June, compared to $2.04 in May. Retail lamb prices are at record highs. Retail price for racks was $15.99 last week compared to $12.89 a year ago.
The Child Tax Credit advance payments have started being deposited in bank accounts. This is expected to keep in-home demand for meat strong.
Widespread rain found its way to the Corn belt recently. Reports indicate that parts of Illinois hit hard by drought received enough rain to cause flooding and crop damage.
Pasture conditions are improving in some top cattle producing states including Texas. Closer to home, Minnesota and the Dakotas have no pasture acres rated Excellent, with just 6 to 11 percent rated Good in those states.
Wisconsin pasture is rated 65 percent Good to Excellent. Both corn and soybean conditions improved 2 percentage points last week and are rated 77 and 73 percent Good to Excellent, respectively.
State markets remain largely steady
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 a handful of cattle that sold to $130.00/cwt. Choice and Prime Holstein steers were steady, bringing $92.00 to $110.00/cwt. There were some packages of Holstein steers selling from 111.00/cwt to $116.00/cwt again this week. Silage fed, under finished, or heavy dairy steers brought $70.00 to $94.00/cwt. Dairy x Beef steers were mostly $90.00 to $118.00/cwt.
Cows were steady to $1.00/cwt higher at $42.00 to $61.00/cwt. Blemish free cows in fleshier condition were selling in to the $70.00s/cwt. Doubtful health and thin cows were bringing $42.00/cwt and lower. Dairy bull calves were lower this week at $30.00 to $70.00/cwt with heavier, well cared for calves up to $100.00/cwt. Beef and beef cross calves brought up to $300.00/cwt. New crop fed lambs sold to $255.00/cwt.