Report: Beef production expected to fall 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.
The USDA left U.S. estimated beef production totals for 2023 unchanged from its previous month’s predictions in the December World Supply and Demand Estimates (WASDE) report released last week. That is still about a 7 percent decrease from 2022.
Global beef production is also expected to go down in the coming year. The decreases are expected in the U.S. and European Union while increasing in Australia, Mexico and India.
Fed cattle prices were lower last week overall, and that weakness spilled over into the beginning of this week. Packers weren’t overly aggressive in seeking out cattle this week, and some feedlot operators were reluctant to sell at steady or lower money.
A winter storm in the Northern Plains hampered cattle movement last week. As expected, harvest totals were lower last week with an estimate of 652,000 head, putting it 11,000 head fewer than the previous week and 16,000 below the same week a year ago. Both fed cattle and cow harvest numbers declined.
The Choice beef cutout value dropped by $7.50 to finish Friday at $248.93 but gained that back and more Monday before finishing Tuesday lower again. Export sales for last week totaled 1,600 metric tons purchased for 2022 and 16,300 metric tons for 2023 delivery.
Pork prices stay low
Cash hog prices were .70 cents lower last week while the carcass cutout value finished the week .25 cents lower at $88.56. Similar to beef, the weakness carried over to the beginning of this week. The cutout value gained $4.20 Tuesday, however, posted at $91.14. The USDA lowered pork production estimates in the WASDE report for the rest of 2022 based on lower butcher hog carcass weights.
Price expectations for 2023 were left unchanged from the November report with prices expected to increase in the second quarter.
Pork exports had a difficult week according to the latest Weekly U.S. Agricultural Export report. Cancelations and decreases in sales caused a net reduction for 2022 sales of 7,900 metric tons. Sales for 2023 totaled 2,400 metric tons.
A widely shared article entitled “The Global Appetite for U.S. Pork Shows No Signs of Retreat” states that over 30 percent of U.S. pork exports have been destined for Mexico this year, with China still an important customer. Although surpassed by chicken for one year in 2020, pork remains the most consumed protein worldwide.
Bump in lamb prices short-lived
The strength in cash lamb and wholesale prices seen last week was short-lived. Market lamb prices were steady to $3.00/cwt lower this week with the gross lamb carcass cutout value dropping $8.77 to finish last week at $538.33. The harvest estimate for last week was 35,000 head putting it 2,000 behind the previous week and 3,000 below the same week a year ago. Year-to-date lamb production is 5.3 percent below 2021 totals. Average live and carcass weights are now running below a year ago.
State livestock market roundup
Fed cattle prices at Wisconsin and surrounding state auction markets were steady to lower compared to last week. High-yielding, high-grading cattle brought $125.00 to $148.00/cwt. Groups of high Choice and Prime lots sold from $148.00 to $158.00/cwt with a few reports of some selling higher.
The Holstein steer market was firm compared to beef breed cattle ranging from $109.00 to $131.00/cwt with high grading Holstein steers selling to $138.00 and a few packages higher. 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 $142.00/cwt.
Cows were mostly steady. A bulk of the cows brought $45.00 to $68.00/cwt with some selling into the high $70.00s. Doubtful health and thin cows were bringing $44.00/cwt and down.
Dairy breed bull calves were lower, bringing $50.00 to $115.00/cwt with heavier, well cared for calves up to $170.00/cwt. Beef and Beef Cross calves were steady, selling to $365.00/cwt.
Market lambs brought $110.00 to $115.00/cwt with a few to $160.00/cwt. There were reports of small groups of lighter weight market lambs selling to $220.00/cwt.