Beef demand remains strong both domestically, internationally

Jeff Swenson

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.

Jeff Swenson

 Negotiated cattle trade was slow to develop this week as feedlot owners held out for higher money. Packers are finding a good supply of fed cattle through auction markets and contracted channels as harvest numbers are running ahead of last week.

Prices were steady to higher in the northern U.S. but lower in the south. There are divergent opinions on fed cattle prices moving forward with some believing we have seen the summer lows. Others point to seasonal demand typically backing off after Independence Day and signs that consumer spending on beef is changing. However, beef demand remains strong both domestically and internationally.

The Choice beef cutout value lost $2.75 last week to finish Friday at $266.26 and has been virtual unchanged this week posting on Wednesday at $266.57. While $61.00 below a year ago, the cutout is still the second highest on record for this week in June. Estimated harvest last week was 667,000 head, 7,000 head less than the previous week and 3,000 head more than the same week a year ago. 

Strong retail pork demand

Cash hogs continue to work higher with strong retail pork demand and year-to-date harvest running 4.4 percent behind 2021. The pork cutout value gained $2.20 to finish last week at $114.61. Estimated harvest was 2.372 million and that was equal to the previous week and 72,000 hogs less than the same week last year.

Many analysts are holding to bullish ideas pointing to continued tight supplies of hogs and expectations for increased domestic demand as budget conscious shoppers look for economically priced proteins. Lean Hog futures at the Chicago Board of Trade have struggled to find firm footing, however, with downward pressure this week.

Lamb harvest lower

The USDA reported heavy market lambs sold $10.00 to $15.00/cwt lower last week while lighter lambs were steady to $10.00/cwt higher. Estimated sheep and lamb harvest last week was 33,000 head, 1,000 head lower than both the previous week and the same week last year. Sheep and lamb harvest is 11.5 percent lower year-to-date when compared to 2021. The average live weight last week was 139 pounds compared to 124 pounds the same week last year. Dressed weights also increased from 62 to 70 pounds. 

Ground beef demand pushes cow prices upward

We can point to increased demand for ground beef as cow prices remain strong even with larger numbers coming to market. That is just one sign of changes in consumer spending.

Kroger CEO Rodney McMullen says customers are seeking out store branded and lower priced proteins. "Customers aggressively moved to pork during the quarter," McMullen said.

In another article appearing in Progressive Grocer, Senior Editor Lynn Petrak wrote that pork is the “dependable protein in the meat case,” noting USDA data shows per capita pork consumption has remained fairly steady over the years and is projected at 51.1 pounds this year.

In the article Anne-Marie Roerink, founder of San Antonio-based 210 Analytics said three-quarters of consumers are looking for promotions while 43 percent say they are seeing less of them.

State market roundup

Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady to $2.00 higher. High-yielding, high-grading cattle brought $128.00 to $142.00/cwt. High Choice and Prime type cattle with an overnight stand at the auction market sold from $142.00 to $150.00/cwt.

Choice Holstein steers were steady to $2.00 higher at $104.00 to $134.00/cwt with high grading Holstein steers bringing $130.00 to $138.00/cwt and a few higher.  Silage fed, under finished, or heavy dairy breed steers brought $72.00 to $104.00/cwt. Dairy x beef steers were bringing $105.00 to $142.00/cwt.

Cows were higher at $58.00 to $84.00/cwt with some selling to the mid $90.00s. Doubtful health and thin cows were bringing $58.00/cwt and down. Dairy breed bull calves were steady, bringing $50.00 to $175.00/cwt with heavier, well cared for calves up to $220.00/cwt.

Beef and beef cross calves were bringing up to $350.00/head. Market lambs brought up to $210.00 with some lighter market lambs selling to $300.00/cwt.