Retail beef prices increase 33% over last year
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.
Packers are working toward a larger harvest ahead of the shortened week due to the Thanksgiving holiday. Last week’s total of 665,000 head was 5,000 more than the previous week’s estimate. Year-to-date harvest is running three percent ahead of last year.
Bids are mostly steady with reports of higher prices at some auction markets and stockyards as packers look to cover short-term needs. The USDA released a Cattle on Feed Report on Friday, November 19, 2021. Trade is expecting a relatively bearish report as the average estimate for placements in October is 2.4 percent higher than the same month a year ago and cattle marketed is falling short of the October 2020 total by nearly four percent.
If estimates are accurate, there will be a good supply of fed cattle in the pipeline through next summer.
Corn futures contracts have been on the rise with the post-harvest lows likely put in. Margins for ethanol have been favorable, adding more competition. Fed cattle futures shrugged off rising grain prices midweek, closing higher on Wednesday and opening higher Thursday. Beef demand remains strong despite continually rising retail prices.
China is emerging as a leading buyer as they develop a taste for U.S. raised grain fed beef. The latest weekly export report showed sales of 30,100 metric tons and that is 23 percent higher than the previous week and 58 percent higher than the four-week average. China purchased 13,800 of that total.
Lower supply of pork doesn't help prices
Hog harvest has been running two percent below 2020 year-to-date, but the lower supply has not helped cash or wholesale prices recently. The pork cutout value was at $84.52 at close of business Wednesday, November 17, 2021, a drop from the previous Friday when it was $94.71.
Harvest last week was estimated at 2.614 million hogs, 11,000 head higher than the previous week and 67,000 head below a year ago. U.S. pork exports matched beef for a 30,100 metric ton total. This was 16 percent below the four-week average. Mexico has been purchasing large quantities of pork recently and bought 16,800 metric tons of that total. China was not listed a buyer.
Hog prices in China have been increasing after a period of low prices paid to Chinese producers. Liquidation and African Swine Fever challenges have begun impacting domestic supply in China.
Sow prices in the U.S. are in the mid $60.00s/cwt, and that is higher than the 20-year November average. The average sow price was below $40.00/cwt in November last year. Market conditions and rising input costs caused higher culling rates last year. Weekly sow harvest is lower than last year, a result of a smaller total swine herd and pause in aggressive culling.
Retail beef prices increase 33% over last year
Retail beef prices have increased every month of 2021 and set a record high for the third consecutive month in October at $7.90/pound. That is a 33 percent increase over last year.
Pork prices at retail have also gone up every month and averaged $4.82/pound in October. Thanksgiving turkeys are also more expensive this year. The average price for fresh whole turkeys and frozen whole turkeys are $1.44 per pound and $1.35 per pound, respectively.
These are all-time high levels, according to the USDA. Higher food prices come at a time when the Consumer Confidence Index posted the lowest reading in a decade.
State market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were steady to higher as packers looked to cover short-term needs. High-yielding, high-grading cattle brought $114.00 to $132.00/cwt with reports of some selling to the mid to high $130.00s/cwt.
Choice and Prime Holstein steers were mostly steady at $91.00 to $112.00/cwt. Some packages were selling to $118.00/cwt with a few above. Silage fed, under finished or heavy dairy breed steers brought $70.00 to $91.00/cwt. Dairy x beef steers were mostly $92.00 to $130.00/cwt. Cows were steady to higher at $32.00 to $52.00/cwt.
Blemish free cows in fleshier condition sold into the $60.00s/cwt. Doubtful health and thin cows were bringing $32.00/cwt and down. Dairy breed bull calves were steady at $50.00 to $100.00/cwt with heavier, well cared for calves up to $160.00/cwt. Beef and beef cross calves brought up to $360.00/cwt. Market lambs sold to $260.00/cwt.