Cattle prices continue to lose ground
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 prices are a full $2.00/cwt lower this week. The Choice beef cutout value continues to lose ground, posting at $262.65 Wednesday afternoon. That compares to $267.94 a week ago.
Packers appear to be putting together decent harvest numbers. Monday through Wednesday estimates are running 13,000 head above the same three days last week. The estimated total of 658,000 head last week was 11,000 more than the previous week. Live weights continue to drop – a result of weather and higher feed costs.
Large swings in futures contracts at the Chicago Mercantile Exchange have become common. Feeder cattle, both futures and cash, have been under significant pressure. Feeder cattle sales across the country are experiencing large runs as cow/calf producers are selling with expectations prices will not improve due to high corn and fuel costs.
Beef cow harvest is still running ahead of levels seen last year. Packer demand for cows has been strong with prices steady to higher. The higher prices have accelerated culling, which will further tighten the future supply of feeder cattle.
Weekly beef export sales set a marketing year high at 27,500 metric tons. China was the lead buyer at 10,400 metric tons.
Pork complex remains bullish
The pork complex remains cautiously bullish. While Lean Hog futures contracts have been a victim of the general volatility seen in the commodity and financial markets, cash hogs and product value remains relatively steady with stronger undertones. The pork cutout value of $107.74 on Wednesday was led by an increase in the value of fresh hams.
The estimated harvest of 2.427 million hogs last week was 69,000 hogs lower than the previous week and 130,000 below the same week in 2021. Monday through Wednesday harvest numbers were ahead of last week as packers are motivated to answer strong demand for pork.
The latest weekly export totals dipped four percent below the four-week average to 25,400 metric tons, but was still considered respectable. Mexico was the lead buyer at 12,800 metric tons with China purchasing 3,600 metric tons. Many traders are watching the U.S. dollar closely thinking the recent decrease in value could spur increased international demand for pork.
Wholesale, retail orders face shortages
Challenges remain throughout the supply chain. Workforce availability, ingredient costs, and transportation dominate conversations with companies making value-added meat items. Processors are having difficulty sourcing items like beef livers, hog snouts, and cheek meat, which are historically lower cost ingredients made into higher value specialty products.
Workforce availability at harvest establishments has caused those companies to forego the extra labor it takes to separate those ingredients. It is becoming more common for processors to short wholesale and retail orders. This challenge has caused customers to place larger orders anticipating their entire order will not be filled.
State livestock market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were $2.00 to $3.00 lower. High-yielding, high-grading cattle brought $121.00 to $141.00/cwt.
Most cattle selling at the high end of the range had an overnight stand at the auction market. Choice and Prime Holstein steers were steady to $2.00 lower at $91.00 to $122.00/cwt with reports of some selling higher.
Silage fed, under finished, or heavy dairy breed steers brought $70.00 to $92.00/cwt. Dairy x beef steers were mostly $99.00 to $134.00/cwt. Cows were mostly steady at $54.00 to $75.00/cwt.
Beef breed cows in fleshier condition were in demand and sold into the high $80.00s/cwt. Doubtful health and thin cows were bringing $53.00/cwt and down. Dairy breed bull calves were higher, bringing $60.00 to $120.00/cwt with heavier, well cared for calves up to $170.00/cwt.
Beef and beef cross calves were steady, bringing up to $350.00/cwt. Market lambs were steady selling up to $230.00/cwt. There is strong demand for bred beef breed females nationally in areas not experiencing severe drought.
Registered bull sales have been strong across the U.S. with buyers paying a premium for reputation and proven genetics. Higher market bull prices are helping cow/calf producers reinvest in new breeding bulls.