Drop in gas prices could spur demand, support cattle prices
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.
According to the latest USDA Cattle on Feed report released Friday, June 24, the number of cattle in feedlots is 1.2 percent higher than June 1, 2021. While that still makes it the largest June 1 inventory since the report began in 1996, it fell on the lower end of pre-report estimates.
Cattle placed into feedlots during May was 2.1 percent lower than the same month last year and that was below the low end of estimates.
The USDA also released a Monthly Slaughter report last week showing beef production 3 percent higher in May compared to last year. The average live weight of cattle harvested during May was down 9 pounds from last year at 1,351 pounds.
According to Scott Brown, Agricultural Economist at the University of Missouri, the report was notable because it indicated that the beef cow harvest year-to-date is running 45 percent higher than the 2015 through 2019 average and heifer harvest is running 21 percent higher.
Harvest last week was estimated at 666,000 head, 1,000 lower than the previous week and 6,000 head more than the same week last year. Cash cattle were steady to strong this week. The Choice Beef cutout value lost $2.25 last week to end Friday at $264.98.
Typically beef demand backs off after the July 4th Holiday. Some analysts are suggesting the recent drop in gas prices could help demand and support cattle prices in early July. The latest weekly export data reported net sales of 17,200 metric tons up 52 percent from the previous week and 6 percent from the prior four-week average.
USDA report: Little change in hog numbers
The USDA released a Quarterly Hogs and Pigs report on Wednesday and most analysts are considering it neutral. Breeding inventory was 6.17 million head according to the report. That is down 1 percent from last year, but up .08 percent from the previous quarter, or about 70,000 head.
Market hog inventory, at 66.4 million head, was down .09 percent from last year, and down slightly from last quarter. All weight classes of market hogs were 1 percent lower than June 1, 2021. Cash hogs were $1.10 higher last week with the pork cutout value gaining $1.00 to end last Friday at $112.20, making it equal to last year.
However, the cutout value is under pressure this week. Cash hogs are trading higher this week even in light of lower wholesale pork prices. Last week’s estimated harvest of 2.304 million hogs was 68,000 below the previous week and 50,000 less than the same week last year.
Pork production in May was 5 percent higher than the same month last year with the average live weight up three pounds at 291 pounds. Weekly pork export net sales of 32,300 MT for 2022 was up 27 percent from the previous week and from the prior four-week average.
Sheep, lamb harvest down
Last week’s estimated sheep and lamb harvest of 32,000 head was 1,000 lower than the previous week and 3,000 head behind the same week in 2021.
The National Weekly Sheep Summary reported heavy market lambs steady to $8.00/cwt lower and light market lambs $5.00 to $8.00/cwt lower. May lamb and mutton production was down 3 percent in May compared to 2021 according to the USDA Quarterly Livestock Slaughter report. Harvest numbers for the month were 10 percent lower than last year with average live weight increasing nine pounds to average 130 pounds.
State market roundup
Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were higher. High-yielding, high-grading cattle brought $130.00 to $147.00/cwt. High Choice and Prime type cattle with an overnight stand at the auction market sold from $145.00 to $155.00/cwt.
Choice Holstein steers were steady to $2.00 higher at $105.00 to $135.00/cwt. with high grading Holstein steers bringing $136.00 to $138.00/cwt with 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 $107.00 to $144.00/cwt.
Cows were $2.00 higher at $60.00 to $86.00/cwt with some selling to the high $90.00s. Doubtful health and thin cows were bringing $60.00/cwt and down. Dairy breed bull calves were steady, bringing $50.00 to $175.00/cwt with heavier, well cared for calves up to $185.00/cwt.
Beef and Beef Cross calves were bringing up to $360.00/head. Market lambs brought up to $240.00 with some lighter market lambs selling to $260.00/cwt.