Meatpackers remain motivated to supply holiday season demand
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.
This is the third consecutive week negotiated fed cattle trade waited until Thursday and Friday to develop. Packers are buying for next week’s shortened production schedule due to the Thanksgiving holiday. Packers will remain motivated to supply holiday season demand.
Weekly harvest totals for the past eight weeks have been larger than the comparable week last year. Last week’s estimated harvest of 671,000 head was 4,000 more than the previous week and 12,000 head above the same week a year ago. The Choice beef cutout value finished last week at $151.86, down 34 cents.
The USDA will release a Cattle on Feed Report on Friday, November 18, after this Update is distributed. October is typically the largest month for placements. The average trade estimate puts the month’s placements at 96.3 percent compared to October 2021, and that would be a significant decline. Fed cattle supply will decline the first quarter of 2023. It is estimated beef production will drop to the lowest level since 1979.
Drop in hog harvest
Last week brought a significant decrease in harvest. The estimate of 2.492 million hogs was 85,000 head below the previous week and 128,000 less than the same week last year. Packer spreads are expected to be under pressure the remainder of 2022. The pork carcass cutout value was $1.15 lower last week, finishing at $96.54. USDA’s Livestock, Dairy, and Poultry Outlook for November estimates fourth-quarter pork production 28 million pounds lower, almost 2 percent below a year earlier.
Hog prices are expected to average $64 per cwt in the fourth quarter. Small but steady value appreciation of the peso has helped pork exports to Mexico and that has supported U.S. ham prices. China did not purchase U.S. pork according to the most recent Weekly Ag Export report. China has not reported their domestic cash hog prices in recent weeks, so it is difficult to know how competitive U.S. raised pork is there currently.
Sheep harvest sees a boost
Sheep and lamb harvest increased to an estimated 37,000 head last week and that was 3,000 more than the previous week, but still 2,000 head below the same week last year. The lamb carcass cutout value fell $1.00 last week to $545.25. The National Sheep Summary reported lamb prices steady to $12.00 higher last week. The average fed lamb live weight of 126 pounds was level with the same week in 2021.
Feedlot inventory on November 1 in Colorado was 209,706 head, 19,633 more than October 1. It should be noted that the November 1, 2021 total was 270,100 and the five-year average is 250,800. Lamb and mutton production is 5 percent lower year-to-date by volume, while harvest volume is 9.4 percent lower year-to-date.
State market roundup
Fed cattle prices were steady to strong this week. High-yielding, high-grading cattle brought $125.00 to $150.00/cwt. Groups of high Choice and Prime lots selling from $151.00 to $163.00/cwt. Choice Holstein steers were mostly steady, bringing $107.00 to $133.00/cwt with high grading Holstein steers bringing $134.00 to $138.00/cwt with some reports of sales in the low $140’s.
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 $144.00/cwt with some lots reported to $147.00/cwt.
Cows were steady. A bulk of the cows brought $49.00 to $72.00/cwt with some selling into the low 80’s. Doubtful health and thin cows were bringing $48.00/cwt and down. Dairy breed bull calves were higher, bringing $50.00 to $170.00/cwt with heavier, well cared for calves up to $215.00/cwt.
Beef and Beef Cross calves were mostly steady, selling to $350.00/cwt. Market lambs brought $100.00 to $115.00/cwt with some reports of tops of $200.00/cwt with some light market lambs selling higher. A recent USDA report estimates the cost of replacement dairy cows during the third quarter was the highest quarterly average since 2016.