Wholesale beef prices fall, but have yet to reach consumers
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.
Grilling season has begun, and with summer officially underway, it is notable that beef sales and features are largely absent at the retail level.
Wholesale beef prices are lower than this time last year and have come off the record highs seen at the beginning of the year, but lower prices have not reached the consumer.
In speaking on the May 31 Professional Dairy Producers of Wisconsin Dairy Signal broadcast, Steve Van Lannen, President and COO of American Foods Group, said that “retailers have really good margins right now and they seem to be satisfied with maintaining margin more than increasing volume.”
The Choice beef cutout did increase by $3.00 last week to end Friday at $265.42 but is still approximately $66.00 lower than this time last year. Cash cattle are lower this week nationally with the USDA reporting the weighted average price of a beef breed steer of $134.98/cwt Wednesday compared to $138.93/cwt last Friday.
Harvest volumes were lower when compared to the previous week, which was expected as some packers ran limited or no shifts on Saturday leading up to the Memorial Day holiday. The weekly estimate was 644,000 head and that was 36,000 head lower than the previous week, but 14,000 head higher than the same week last year.
Carcass weights have been decreasing and there has been a drop in the number of fed cattle grading Choice or higher. This may indicate that fed cattle supplies, although high, are staying current. It could also be attributed to more cattle that went into feedlots as calves, rather than yearlings, are coming to market.
Cash hog prices move higher
Cash hogs gained $2.60/cwt last week and continue to move higher. The USDA posted a national weighed average of $86.47/cwt on June 1 with the national carcass base price of $115.68. The pork carcass cutout value also continues to make gains, ending last Friday at $106.16 or $4.20 higher on the week, and was $110.02 on June 1.
The harvest estimate for last week was 2.351 million, 63,000 hogs less than the previous week and 14,000 hogs lower that the same week last year. Average live weights for market hogs has been holding around 286 pounds, approximately three pounds heavier than a year ago.
Lean Hog futures contracts closed sharply lower Monday, but rallied higher at midweek. Vietnam says they have developed a vaccine to protect pigs from African Swine Fever. They have been developing the vaccine since November of 2019 in collaboration with the U.S. Vietnam leaders want to be the first country to produce and export the vaccine, but it is not in production yet.
Lamb prices fall
Sheep and lamb harvest was estimated to be 35,000 head for the second week in a row and that equals the same week last year. Lamb prices were called $20.00 to $40.00/cwt lower last week nationally. Slaughter ewes were called $15.00/cwt lower and feeder lambs $10.00 to $30.00/cwt lower.
The sheep and lamb market at Wisconsin and neighboring state auctions was not well tested. Prices are generally expected to decline this time of year as lamb does not typically follow the same seasonal trend of other proteins. The wholesale price of loins has dropped considerably recently.
State livestock market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were steady to $1.00 lower. High-yielding, high-grading cattle brought $126.00 to $139.00/cwt.
High Choice and Prime type cattle with an overnight stand at the auction market sold from $140.00 to $146.00/cwt. Choice Holstein steers were steady at $99.00 to $128.00/cwt, with high grading Holstein steers bringing $128.00 to $134.00/cwt.
Silage fed, under finished, or heavy dairy breed steers brought $72.00 to $99.00/cwt. Dairy x beef steers were lower, bringing $99.00 to $138.00/cwt.
Cows were lower at $52.00 to $75.00/cwt. Beef breed cows in fleshier condition continued to sell into the $80.00s/cwt. Doubtful health and thin cows were bringing $52.00/cwt and down.
Dairy breed bull calves were higher, bringing $50.00 to $120.00/cwt, with heavier, well cared for calves up to $180.00/cwt. Beef and beef cross calves were bringing up to $350.00/head. Market lambs were not well tested with reports of some old crop lambs bringing $128.00 to $148.00/cwt.