Fed cattle supplies to tighten going forward
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.
The USDA called fed cattle fully steady last week. Feedlot operators are asking higher prices this week as they speculate fed cattle supplies will tighten going forward. Packers are reluctant to bid higher with wholesale beef prices showing recent weakness.
The Choice beef cutout fell to $243.75 last week, a $3.10 drop. That puts the cutout value over $50.00 lower than this time last year. While prices at local auction market were mostly steady early this week, there were reports of packers willing to pay higher prices for exceptional high yielding cattle likely to grade High Choice or Prime.
Rains in some drought stricken areas during the past weeks have pastures beginning to green and ranchers there hopeful to slow liquidation. It will depend on the ability to harvest enough forage for winter and a good winter wheat crop for spring grazing.
Even with tighter packer margins, harvest pace continues to be impressive. Last week’s harvest estimate of 664,000 head was 3,000 head less than the previous week and 24,000 head more than the same week last year. Cows (both beef and dairy breeds) made up about 19 percent of that total, putting cow harvest in line with numbers seen in October the past three years.
Impact of lower sow numbers felt
Last week’s Quarterly Hogs and Pigs report showed a decrease of 300,000 sows since the end of 2019. The top two pork producing states, Iowa and North Carolina, saw their breeding herd shrink. Illinois added sows, passing Minnesota for the number three spot.
According to October 3 edition of the Jim Long Pork Commentary, the drop in sow numbers has caused a 1 million head decrease in market hogs compared to September 2021 and a seven percent decline (5.118 million fewer hogs) compared to September 2020.
Cash hogs were $2.00/cwt lower last week. The pork cutout value lost $3.70 to end Friday at $97.59, and is now about $13.50 lower than this time in 2021. Last week’s estimated harvest of 2.2526 million hogs was 12,000 hogs less than the previous week and 9,000 head more than the same week last year.
Market lamb prices creep upward
Market lambs were called $5.00 to $30.00 higher last week. The carcass cutout ended last week $3.08 lower at $553.27. The harvest estimate last week was 33,000 head, even with the previous week and 4,000 head below the same week last year.
Exports of U.S. raised mutton and lamb have been strong this year, but so have imports. Lamb imports have been higher every month but June this year when compared to 2021. The U.S. imports more lamb than it produces, with about 75 percent from Australia with most of the balance coming from New Zealand.
Crop progress
Corn for silage harvest as of October 2 was 59% complete in Wisconsin, 12 days behind last year and five days behind the average. Nationally, 27% of the corn crop has been harvested. The fourth cutting of alfalfa was reported at 94% complete in the state. Pasture condition in Wisconsin was rated 66% good to excellent, down one percentage point from last week.
State livestock market roundup
Choice beef breed steers and heifers were mostly steady with last week with strong demand again on exceptionally well fed cattle. High-yielding, high-grading cattle brought $122.00 to $146.00/cwt. Groups high Choice and Prime lots selling from $150.00 to $155.00/cwt.
Choice Holstein steers were steady at $107.00 to $135.00/cwt with high grading Holstein steers bringing $135.00 to $140.00/cwt with some packages selling higher. Silage fed, under finished, or heavy dairy breed steers brought $75.00 to $107.00/cwt. Dairy x Beef steers were bringing $105.00 to $147.00/cwt.
Cows were lower. A bulk of the cows brought $55.00 to $75.00/cwt with some selling into the mid 80’s. Doubtful health and thin cows were bringing $55.00/cwt and down.
Dairy breed bull calves were steady, bringing $50.00 to $100.00/cwt with heavier, well cared for calves up to $140.00/cwt with some reports of calves bringing $155.00/cwt. Beef and beef cross calves were mostly steady, selling to $390.00/cwt. Market lambs brought $95.00 to $115.00/cwt with some reports of tops on light lambs to $165.00/cwt.