It will take time for cattle harvest numbers to reach 2021 levels
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.
Nationally, fed cattle are trading steady with what was called a $2.00 lower market last week. There are some reports of higher bids materializing on Wednesday in a few regions.
Weekly harvest estimates for last week were lowered to 618,000 head, 2,000 head lower than the week ending January 8, 2022. That compares to 652,000 head the same week in 2021. Expectations are for a higher harvest number this week, but it will take some time before we see numbers comparable to last year.
The Choice Beef Cutout Value finished last week at $284.31, approximately $70 higher than this time last year. The National Weekly Fed Cattle Comprehensive report showed fed beef breed cattle carcass weights averaging 897 pounds, three pounds lower than the previous week and two pounds below last year. Widespread cold weather and an above average number of fed heifers in the market are factors in the decline.
A Cattle on Feed report will be released Friday, Jan. 21, 2022. Average trade estimates are for cattle on feed to be 99.7 percent compared to January 1, 2021 with placements at 101.8 percent and marketings at 100.9 percent.
Placements will be the number to watch as some estimates are as high as 105 percent. Forecasted fed cattle prices in 2022 were adjusted $2.00/cwt higher in the January World Supply and Demand report to $139.00/cwt.
Pork carcass cutout values jump
Lean Hog futures contracts finished last week $1.00 higher. Cash prices on a carcass basis are more than $6.00/cwt higher compared to the end of last week.
A good measure of wholesale pork prices, the Pork Carcass Cutout Value has seen a large jump this week, posting at $95.47 Wednesday compared to $89.07 Friday, Jan. 14, 2022. Most notable was the $30.61 increase in hams, a rise of about one-third. The January World Supply and Demand Estimate report raised the estimate for 2022 barrow and gilt prices $0.50 to $61.00/cwt.
U.S. pork export expectations were adjusted downward as China is expected to import nearly 500,000 metric tons less pork in 2022. The weekly harvest estimate for last week was 2.407 million head, 6.3 percent below the 2.568 million head from the previous week.
Retailers push back on higher beef prices
The average retail price of pork and beef decreased in December 2021. The composite retail beef price was $7.66 per pound compared to $7.85 in November 2021. The average retail price of pork dropped to $4.74 per pound in December 2021 from $4.82 the previous month. Both beef and pork retail prices are more than 25 percent higher than the 2016 to 2019 averages.
Chicken prices increased slightly in December 2021 from $2.21 to $2.22, and egg price per dozen increased $0.08 to $1.79. It would be impossible to argue that protein demand is not still extremely strong. However, there are some potential headwinds to watch for.
Reports of retailers pushing back on higher beef prices are becoming more common. The Consumer Sentiment Index dropped 2.5 percent in January 2022 compared to December 2021. It is now 13 percent below January 2021.
The latest jobless report showed an increase in claims, raising concerns about future demand. Analysts are also pointing to the rising value of the U.S. dollar as a factor that could limit red meat exports.
State livestock market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady to $1.00 lower. High-yielding, high-grading cattle brought $122.00 to $138.00/cwt with tops in the low $140.00s/cwt.
Choice and Prime Holstein steers were steady at $93.00 to $116.00/cwt. Some packages were selling to $120.00/cwt. Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $94.00/cwt. Dairy x beef steers were mostly $95.00 to $134.00/cwt.
Cows were steady to $2.00 higher at $41.00 to $57.00/cwt. Blemish free and beef breed cows in fleshier condition sold into the mid $60.00s/cwt. Doubtful health and thin cows were bringing $35.00/cwt and down.
Dairy breed bull calves were lower, bringing $50.00 to $85.00/cwt with heavier, well cared for calves up to $160.00/cwt. Beef and beef cross calves were lower, bringing up to $320.00/cwt. Market lambs were lower, selling up to $235.00/cwt.