Higher corn futures have Feeder Cattle futures contracts under pressure
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 USDA’s monthly Cattle on Feed report, released on Feb. 25 was within trade estimate ranges in all categories. Overall, the report was considered friendly to the market. The number of cattle in feedlots on February 1 in the U.S. was about one percent higher than the same date in 2021. Cattle placed in January came in at 98.8 percent compared to the year prior. Cattle marketed in January 2022 was three percent below January 2021.
The USDA Monthly Slaughter report showed beef production down two percent in January. Cattle harvested was down two percent by head and cattle weights were one pound lower than a year ago. Beef cow harvest in January 2022 was 12 percent higher than January 2021, pointing to continued culling and liquidation in drought stricken areas.
Fed cattle prices have managed to stay steady, although country trade was slow to develop early in the week and limited sales were mostly $1.00 lower. Harvest last week dipped by 13,000 head with an estimate of 647,000 head. The total is still an improvement from earlier this year.
The most recent weekly export data showed sales of beef higher than the previous week and 23 percent higher than the four-week average at 23,800 metric tons. Major buyers were South Korea, China, and Japan. Higher corn futures have had Feeder Cattle futures contracts under pressure for some time. Auction markets across the country reported feeder cattle as $1.00 to $3.00 lower last week.
Lean hog futures lose steam
Lean Hog futures lost steam amid higher corn and soybean contracts but did mount a recovery Tuesday and Wednesday. Economic uncertainty amid geopolitical concerns has had an effect on all agricultural commodities, causing volatility in the protein complex.
Cash hogs remain higher based on supply. The pork cutout value ended last week at $113.32 but has moved lower this week, mostly on weakness in the bellies. The estimated harvest of 2.507 million last week was 9,000 hogs more than the previous week but 142,000 less than the same week last year.
Pork production in January was eight percent lower than the same month last year. Hog harvest dropped by seven percent and live weight dropped one pound when compared to January 2021 to average 294 pounds per head.
Pork exports had a good week, up 80 percent from the four-week average to total 42,200 metric tons. The lead buyer was Mexico at 17,000 metric tons, but was followed closely by China at 16,600 metric tons. China purchases had been nonexistent in recent weeks and the sale is notable since there are widespread reports of overproduction there.
Lamb production down
Lamb and mutton production in January was six percent below the previous year. Sheep harvest totaled 154,100 head, five percent below last year. The average live weight was 127 pounds, down two pounds from January 2021. Market lambs nationally are quoted as being $10.00/cwt higher although the market was lightly tested in Wisconsin and surrounding states this week.
State livestock market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady. High-yielding, high-grading cattle brought $124.00 to $145.00/cwt with tops reported from $146.00 to $151.00/cwt. Choice and Prime Holstein steers were steady to $1.00 higher at $93.00 to $126.00/cwt with reports of some selling higher.
Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $94.00/cwt. Dairy x beef steers were mostly $99.00 to $137.00/cwt. Cows continue to work higher at $54.00 to $75.00/cwt.
Blemish free and beef breed cows in fleshier condition sold into the low $80.00s/cwt. Doubtful health and thin cows were bringing $53.00/cwt and down. Dairy breed bull calves were steady bringing $50.00 to $100.00/cwt with heavier, well cared for calves up to $160.00/cwt. Beef and beef cross calves were steady, bringing up to $350.00/cwt.
Market lambs were steady, selling up to $230.00/cwt with reports of lighter market lambs bringing up to $270.00/cwt.