Report foreshadows tight fed cattle supplies in 2023
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.
Cattle on feed hits historic low
It was no surprise the latest USDA Cattle on Feed Report showed placements below a year ago. The 2.11 million head placed in October was a 6 percent drop from last year and is the lowest for the month since the report began in 1996.
The number of cattle on feed on November 1st was 2 percent below a year ago. This foreshadows the tight fed cattle supplies we will see in 2023. If summer demand is strong in 2023, there will be a need to pull cattle ahead making supply even lower in the third quarter.
Fed cattle prices were called unchanged by the USDA last week. This will be a shortened production week, but packers appeared to be in the market buying cattle for both this week and next. Estimated harvest for last week was 674,000 and that is 3,000 head more than the previous week. It was 6,000 head below the same week last year – the first time harvest was less than the comparable week in 2021 in at least eight weeks.
We may see harvest top 580,000 this week – a good number given the Thanksgiving holiday. Wholesale prices took a step back last week, with the Choice cutout value falling $6.22 to finish last Friday at $254.87. Cutout values were working higher the beginning of this week with some analysts calling for steady to higher product prices in the short term.
Hogs continue downward trend
Last week’s estimated hog harvest was 2.605 million; 102,000 below the previous week and 27,000 below the same week last year. Smaller weekly harvest totals along the lighter live and carcass weights have led to a 2.5 percent drop in overall pork production year-to-date.
Cash hog prices fell 90 cents last week. The pork carcass cutout value declined by $1.40 to finish the week at $93.44 and that weakness continued on Monday and Tuesday of this week.
Highly Pathogenic Avian Influenza (HPAI) has hurt turkey, chicken, and egg supply. Ham is being substituted for turkey in many shopping carts and that continues to support prices.
Exports have been an up-and-down affair recently with Mexico continuing to be an important trade partner. Last week, 60 percent of pork exported headed south of the border.
Fed lamb market improving
The fed lamb market is improving with prices called steady to $20.00/cwt higher last week. Wholesale prices are still showing weakness, however, with the carcass cutout value finishing last week at $538.00, a $7.25 drop. Last week’s estimated harvest of 38,000 sheep and lambs was 1,000 more than the previous week and 3,000 behind the same week last year. Holiday demand may support cash lamb prices, although demand may fall short of previous years.
Harvest wrapping up
According to the latest Crop Progress report, Wisconsin farmers have completed 77 percent of this year’s corn harvest. That compares to 96 percent nationally. Fall tillage in Wisconsin was 77 percent complete, 3 days behind last year.
Statewide market roundup
Note: market prices reflect Monday and Tuesday sales only. Fed cattle prices were steady to higher early this week. High-yielding, high-grading cattle brought $125.00 to $152.00/cwt. Groups of high Choice and Prime lots sold from $153.00 to $163.00/cwt. Choice Holstein steers were also mostly steady to higher, bringing $109.00 to $135.00/cwt with high grading Holstein steers selling into the low $140’s.
Silage fed, under finished or heavy dairy breed steers brought $75.00 to $109.00/cwt. Dairy x Beef steers were bringing $105.00 to $145.00/cwt with some lots reported to $150.00/cwt.
Cows were mostly lower. A bulk of the cows brought $45.00 to $70.00/cwt with some selling into the low 80’s. Doubtful health and thin cows were bringing $45.00/cwt and down. Dairy breed bull calves were steady to higher, bringing $55.00 to $175.00/cwt with heavier, well cared for calves up to $215.00/cwt.
Beef and Beef Cross calves were steady, selling to $350.00/cwt. Market lambs brought $110.00 to $128.00/cwt with some lighter lambs selling higher.