Lean hog futures take a beating

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

Packers were active in the country last week buying cattle for the full work-week before Labor Day. Fed cattle prices were steady to $1.00 higher. It is likely many packing establishments will not operate the Saturday of the holiday weekend with talk that some may also give employees that Friday off as well.

The USDA released a Cattle on Feed report Friday, August 19.  The trend of moving calves from drought impacted areas into feedlots continued, pushing July placements 1.8 percent higher than a year ago and total cattle on feed to 1.4 percent higher than July 2021.

Placement of feeders weighing less than 700 pounds was 9.5 percent higher while placements of feeders over 700 pounds lagged behind last year by 2.5 percent. The lighter weight cattle will begin being marketed in November and supply will last into the first quarter of 2023.

Wholesale beef prices have been softening somewhat, with the Choice beef cutout value .50 cents lower last week finishing Friday at $264.28. That weakness has spilled into this week. The softer tone is following typical seasonal trends. Harvest continued at a brisk pace with last week’s estimate at 661,000 head. That is 14,000 head more than the previous week although it was 5,000 head fewer than the same week last year. 

Lean hog futures take a beating

Lean Hog futures contracts have taken a beating for several trading sessions, but that had not spilled over to the cash hog market until this week. It is typical to see a larger supply of hogs to begin coming to market this time of year.

Live and carcass weights have been decreasing indicating supplies are current and that market hogs are being pulled forward. Domestic demand for pork has been excellent.

Exports have been consistently behind last year’s levels. Pork shipments did moderate in the second half of 2021 so we will soon be comparing export sales to those lower weekly totals.

Estimated harvest last week was 2.395 million head, an impressive 70,000 head higher than the previous week. The harvest pace continues to be lower than 2021, with 37,000 fewer hogs harvested compared to the same week last year.

The pork carcass cutout value had a strong run before running out of steam the last two weeks, finishing Friday at $117.15, another $3.00 lower than the previous week.

Sheep prices struggle to find footing

Sheep and lamb prices have been struggling to find firm footing. Fed lambs nationally were called steady to $5.00/ cwt lower last week. Feeder lamb prices had been running below the five year average did show strength, however.

The lamb carcass cutout was once again lower finishing last week at $574.91.

There’s no question domestic demand has weakened compared to the other red meats. Last week’s estimated harvested equaled both the previous week and the same week last year at 33,000 head. While harvest seems to be keeping pace, live weights have increased from 118 pounds a year ago to 134 pounds.

Wisconsin livestock market roundup

Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were steady to $1.00 higher. High-yielding, high-grading cattle brought $126.00 to $146.00/cwt. Some markets reported high-yielding steers and heifers again this week from $146.00 to $150.00/cwt and some exceptional groups above.

Choice Holstein steers were steady at $107.00 to $137.00/cwt. with high grading Holstein steers bringing $127.00 up to $143.00/cwt/cwt.  Silage fed, under finished or heavy dairy breed steers brought $75.00 to $110.00/cwt. Dairy x beef steers were bringing $107.00 to $146.00/cwt.

Cows firmed after recent weakness with the bulk selling steady to $1.00 higher from $60.00 to $83.00/cwt with some selling to the mid $90s. Doubtful health and thin cows were bringing $55.00/cwt and down.

Dairy breed bull calves were weak, bringing $40.00 to $125.00/cwt with heavier, well cared for calves up to $145.00/cwt. Beef and beef cross calves were also lower bringing up to $325.00/head with some reports of some selling higher.

Market lambs brought up to $127.50/cwt with lighter lambs up to 90 pounds bringing up to $185.00/cwt with reports of a few packages selling higher.