Beef remains protein of choice for Americans
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.
Fed cattle markets were mostly steady this week. Country trade was slow to develop with feedlot operators holding out for higher bids.
The estimated harvest of 676,000 head last week was 110,000 head higher than the previous week and 7,000 head above the same week in 2020. With the beef needed to answer the holiday demand largely in the pipeline, this was likely the largest harvest we will see the remainder of the year and into 2022.
We would typically see demand backing off when we turn the calendar to a new year, but seasonal trends have not always held since the COVID-19 pandemic. Beef remains the protein of choice for Americans, even at record high retail prices. The cutout value seems to be losing steam but is still roughly $30.00 higher than this time last year.
The most recent weekly export report showed orders for 14,600 metric tons with 10,400 metric tons of that earmarked for 2022 delivery. China has emerged as an important buyer of U.S. raised beef and was once again a buyer this week.
Feeder cattle auctions have shown higher prices as feedlot optimism for a tightening fed cattle supply in 2022 remains the consensus.
Hog, pork markets show signs of life
Hog and pork markets have been lackluster recently but showed some signs of life this week. The pork cutout value was sharply higher on December 8, 2021, gaining $9.35 and posting as $90.44. Wholesale ham values showed the highest increase of primals, gaining $29.58 on Wednesday. Cash hogs on a live basis were also higher at midweek, showing an increase of more than $5.00/cwt.
The pork sector also saw an impressive week of harvest with an estimate of 2.667 million hogs, which is 406,000 head more than the previous week and 119,000 higher than the same week last year. Similar to beef, harvest numbers this high are not likely in the coming weeks.
Domestic demand for pork remains strong but not keeping pace with beef. Concerns about decreased sales to China remain and have pressured the market. Pork export sales for the reporting week ending December 2, 2021 showed a total of 20,500 metric tons of U.S. pork ordered by foreign buyers.
Mexico accounted for 16,700 metric tons of the total. China did buy pork again this week, but the total was disappointing at just 100 metric tons.
Lamb sees good retail demand
Live lamb prices have backed off from the levels seen during fall, with the USDA reporting a weighted average of $228.67/cwt for the week ending December 3, 2021. Volume has been down at sheep and lamb auctions recently.
The Sioux Falls market at midweek reported prices $1.00 to $3.00/cwt higher on heavier lambs, but lower on light lambs. Domestic lamb demand typically increases during the holidays and retail needs are likely met.
Lamb has seen good retail demand as consumers look for variety while cooking at home. It appears prices will continue to benefit from tight lamb supplies into 2022. High U.S. lamb prices do spur higher lamb imports, which could limit domestic price upside.
State markets mostly steady
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady. High-yielding, high-grading cattle brought $125.00 to $138.00/cwt with reports of some selling in the low $140.00s/cwt.
Choice and Prime Holstein steers were mostly steady to $1.00 higher this week at $92.00 to $115.00/cwt. Some packages were still selling to $118.00/cwt with a few packages above.
Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $92.00/cwt. Dairy x beef steers were mostly $95.00 to $135.00/cwt.
Cows were higher at $34.00 to $55.00/cwt. Blemish free and beef breed cows in fleshier condition sold into $60.00s/cwt. Doubtful health and thin cows were bringing $34.00/cwt and down.
Dairy breed bull calves were steady to lower, bringing $50.00 to $90.00/cwt with heavier, well cared for calves up to $130.00/cwt. Beef and beef cross calves were lower, bringing up to $315.00/cwt.
Market lambs were lower, selling to $235.00/cwt. Feeder cattle sales were strong with exceptional demand for heavier cattle weighing 750 pounds and up. This trend is holding for both beef breed feeders and Holstein steers.