USDA report: U.S. beef herd is shrinking
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.
The annual Cattle Inventory report released this week was one of the most anticipated of this report series. Cattle producers and traders all looked to confirm that the national beef herd is shrinking.
Smallest beef cow herd in over a decade
The U.S. beef cow herd dropped by two percent or 718,500 head. Beef replacements were three percent lower than the beginning of 2021. This is the smallest U.S. beef cow herd in 10 years.
Wisconsin was one of 15 states that grew their beef cow inventory, increasing by 5,000 head to 295,000 head or an increase of two percent. Heifer retention in the state indicates farmers intend to continue growing the beef herd. Wisconsin also had the largest percentage increase in cattle on feed of any state, growing from 250,000 head to 270,000 head or an increase of eight percent.
The cash cattle trade developed early this week with higher prices. February tends to bring lower demand for beef, creating the potential for packer margins to tighten in the short-term. The Choice Beef Cutout value has been weaker. Weekly harvest has been increasing after a disappointing start to the year.
The estimate for last week was 436,000 head, 7,000 head higher than the previous week but 13,000 head lower than the same week last year. Harvest numbers will increase once again this week.
Hog harvest increases
Weekly hog harvest has been increasing, similarly to the beef sector. The estimate of 2.546 million head last week is up 106,000 head from the previous week and 114,000 head lower than the same week last year.
Lean Hog futures and the pork carcass cut-out value have shown strength recently. There is optimism among pork producers even with rising feed costs. There is talk of empty finishing barns, and that is unlikely to change given current sow inventory and farrowing intentions. It is still easy to find opinions that pork will benefit if beef demand lessens due to price.
Feeder pig prices were $2.00 per head higher this week, as demand remains moderate. Early weaned pigs were $6.00 per head higher.
Lamb prices ahead of 5-year average
Lamb prices have been running well ahead of the five-year average since early 2020. While a price correction could happen, it is unlikely we will see prices go back to those seen three to five years ago for some time.
Lamb continues to enjoy a modest resurgence in popularity and fed lamb demand is tight. As mentioned in previous updates, ewe culling was accelerated by drought conditions. Wooled and shorn lambs weighing 100 to 140 pounds sold in the wide range of $200.00 to $245.00/cwt nationwide.
Cold storage meat supplies
Red meat supplies in cold storage are still running below last year. Total red meat supplies in freezers were up one percent from the previous month but down six percent from last year. Total pounds of beef in freezers was up three percent from the previous month but down six percent from last year. Frozen pork supplies were down one percent from the previous month and down four percent from last year.
State market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady to $1.00 higher. High-yielding, high-grading cattle brought $122.00 to 140.00/cwt with tops in the mid $140.00s/cwt and some above.
Choice and Prime Holstein steers were steady at $93.00 to $120.00/cwt. A few packages were selling higher. Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $94.00/cwt. Dairy x beef steers were mostly $97.00 to $138.00/cwt.
Cows were higher again this week at $45.00 to $65.00/cwt. Blemish free and beef breed cows in fleshier condition sold into the $70.00s/cwt. Doubtful health and thin cows were bringing $45.00/cwt and down.
Dairy breed bull calves were lower, bringing $50.00 to $100.00/cwt with heavier, well cared for calves up to $165.00/cwt. Beef and beef cross calves were lower, bringing up to $300.00/cwt. Market lambs were steady, selling up to $240.00/cwt.