Tight supplies, weather disruptions drive need for cattle, higher prices
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 markets are moving higher at a time when prices tend to decline seasonally. Higher asking prices by feedlot operators, tighter supplies and weather disruptions have left packers in need of cattle. Market cow prices have steadily increased over the past four weeks. Beef breed fed steer prices are more than $5/cwt higher than the beginning of the year.
Last week’s estimated harvest of 618,000 head was 9,000 less than the previous week and 33,000 below a year ago. Packers are on pace to beat last week’s totals. Negotiated country cash trade was slow to develop with some mid-week sales reported $1 higher.
The Choice beef cutout value jumped over $6 last week to $287.28. The USDA’s latest Cattle on Feed report showed a Feb. 1 inventory totaling 11.7 million head, 4% lower than a year ago. Cattle placed in feedlots during January was also 4% less than last year. The report didn’t cause a major reaction on the Chicago Mercantile Exchange, as the numbers were within trade expectations.
Live Cattle futures are trading at eight-year highs, and some brokers are warning producers that we could see a correction even given bullish fundamentals. The latest weekly ag exports report showed sales of 8,100 metric tons, an unimpressive number when compared to recent weeks.
Weather stymies hog movement, sales
Pork production was significantly lower last week as weather impacted hog movement. The estimated harvest of 2.375 million hogs was 130,000 below the previous week and 117,000 less than the same week last year. This is only the second time this year harvest was below the corresponding week in 2022. Both times weather was to blame for the decrease.
Production this week is back to outpacing year ago levels. Cash hogs were $2/cwt higher last week. Exports have been strong so far this year but did take a step back according to the latest weekly data. For the period Feb. 17-23, 2023, sales of U.S. pork were 310,000 metric tons. Lower production and high prices in Europe could put the U.S. in a favorable position to increase exports.
Rabobank’s latest North American Agribusiness Review cites larger-than-expected harvest levels and large supplies of competing meat as pressuring pork prices. Al Griffin, senior data analyst and author of the report, wrote that “sizable increases in poultry supplies and heavy cold storage inventories are expected to limit upsides in pork prices through spring, although current indications of improved retail support for pork should help the industry gradually eliminate the surplus.”
Cutout values were higher last week with an increase of $3.10 to finish last week at $55.35.
Cash lamb prices hold firm
Cash lamb prices were firm to higher last week, although wholesale prices showed weakness once again. The lamb carcass cutout fell $4.53 to end last week at $528.34. There was a decrease in retail outlets featuring lamb last week as grocers may be positioning for the Easter holiday. An estimated harvest total of 34,000 sheep and lambs last week was 3,000 head below the previous week, but still 4,000 higher than last year.
State livestock market roundup
Fed cattle prices at Wisconsin and surrounding state auction markets were steady. High-yielding, high-grading cattle brought $135 to $160/cwt. Groups of high Choice and Prime lots sold from $160 to $170/cwt with reports of some higher.
The Holstein steer market was fully steady to higher this week ranging from $115 to $143/cwt with the top end bringing $145 to $148 and some packages above. Silage fed, under finished or heavy dairy breed steers brought $78 to $114/cwt. Dairy x Beef steers were bringing $107 to $150/cwt.
Cows were $1 to $4 higher. A bulk of the cows brought $65 to $88/cwt, with some selling into the high $90s.There were reports of beef breed, fleshy cows selling over $100/cwt. Doubtful health and thin cows were bringing $65/cwt and down.
Dairy breed bull calves were steady, bringing $50 to $150/cwt with heavier, well-cared-for calves selling up to $200/cwt. Beef and Beef Cross calves were selling to $360/cwt. Shorn market lambs were bringing $135 to $148/cwt. Some lighter lambs sold to $185/cwt.