Fed cattle prices nearly 14% higher than a year ago
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.
Both cattle feeders and packers will try to maintain positive margins this month. The fed cattle being marketed now were purchased last summer when feeder prices were higher and that is coupled with high feed costs. Feedlot operators will work to leverage lower fed cattle supplies into higher bids.
Packers saw gains in wholesale prices during the last two weeks of 2022 and will manage production schedules and beef supply. It is the scenario that typically causes country trade to wait until late in the week to develop.
Farmers in the Midwest will be motivated to sell cattle amid milder temperatures and before another weather event. It is reported forward contract volume is below year ago levels and will make packers more reliant on cash markets. For now, packers are finding enough cattle to continue bidding steady money.
Fed cattle prices are about 14% higher than a year ago, while the Choice beef cutout value is up between 5% and 6% compared to the beginning of 2022. The Choice beef carcass cutout was up $1.01 on the week, finishing Friday at $282.99. The past week’s estimated harvest was 563,000, putting it 16,000 over the previous week, but 56,000 under last year.
Woes continue for farrow-to-finish farmers
Margins are still in the red for farrow-to-finish farmers. According to the Sterling Profit Tracker, losses per head were $24.00 last week. That is a $20.00 per hog larger loss than the same week last year.
Pork carcass cutout values finished last week $3.90 lower at $84.00 and continued to work lower through mid-week. The decrease in harvest volume during the holidays has put pressure on both cash and futures prices to start 2023.
Steve Meyer of Kerns and Associates, Ames, Iowa, tracks real per capita expenditures (RPCE) of pork. His latest data shows the RPCE for pork has been below year-ago levels since August and the year-to-year decline is growing. The November pork RPCE was 8% lower than a year earlier, but Meyer notes 2021’s levels were record highs.
There is evidence supporting consumers are spending less on pork, beef and chicken at both the retail and foodservice level. Overall meat protein demand remains strong, but concerns regarding consumer sentiment and economic news remains.
Last week’s estimated harvest was 2.296 million hogs was 102,000 more than the previous week and 256,000 less than the same week last year.
Sheep, lamb harvest lag lingers
Sheep and lamb harvest last week was estimated to be 26,000 head, even with the previous week and 7,000 less than the same week last year. The lighter volume helped improve wholesale lamb prices. The carcass cutout value on Monday was $537.13, making it $5.43 higher than December 30.
Retailers featured rack of lamb during the holidays and increased lamb advertising to promote it. Feature activity at retail decreased during the first week of this year, which was expected. While the U.S. continues to import more lamb than it exports, the development of markets such as the Caribbean for muscle cuts was a bright spot in 2022.
State livestock market roundup
Fed cattle prices at Wisconsin and surrounding state auction markets were steady. High-yielding, high-grading cattle brought $133.00 to $152.00/cwt. Groups of high Choice and Prime lots sold from $153.00 to $166.00/cwt. The
Holstein steer market was strong this week ranging from $115.00 to $141.00/cwt with a few packages selling to $143.00. Silage fed, under finished or heavy dairy breed steers brought $77.00 to $115.00/cwt. Dairy x Beef steers were bringing $107.00 to $145.00/cwt with packages to $150.00/cwt.
Cows were steady to higher. A bulk of the cows brought $54.00 to $75.00/cwt with some selling into the high $80.00s. Doubtful health and thin cows were bringing $54.00/cwt and down.
Dairy breed bull calves were higher bringing $70.00 to $150.00/cwt with heavier, well cared for calves up to $210.00/cwt. Beef and Beef Cross calves were steady, selling to $350.00/cwt. Market lambs brought $120.00 to $132.00/cwt. There were reports of lighter lambs selling to $170.00/cwt.