Margins continue to motivate packers to move cattle through supply chain

Jeff Swenson

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.

Jeff Swenson

DATCP is reminding Wisconsin meat processors of the approaching deadline to apply for meat processor grants. Eligible applicants must submit their applications by 5 p.m. on Fri., Mar. 17. DATCP will award grants for up to $50,000 for projects that are up to two years in duration and help expand capacity or increase throughput. Processors are required to provide a 100% match of the grant amount. Recipients will be chosen through a competitive selection process. Processors who have a current grant with DATCP are welcome to apply. More information and the application can be found on the DATCP website:

Margins motivate packers

Margins continue to motivate packers to move cattle through the supply chain. Harvest this week was outpacing last week and a year ago through midweek. Last week’s estimate of 629,000 head harvested was 11,000 more than the week prior and 30,000 below the same week last year. The Choice beef cutout value had gained $2.10 last week to $289.32 Friday. Those gains were erased by Wednesday of this week, as the cutout fell to $284.78.

It is too early to tell if this will be an end to wholesale price upward momentum. The decrease in milk prices will need to be watched as it could bring additional dairy cows to market this year. Exports are off to a slow start in 2023, with the recent data not helping the cause. The latest export sales report showed just 5,600 metric tons of U.S. beef purchased by foreign buyers. That figure is a marketing year low.

Hog harvest about year-ago levels

Hog harvest continues above year-ago levels. The Christmas and New Year’s holidays falling on a weekend with some packers giving employees three-day weekends are said to have caused backups. Hog weights are lower than a year ago, so even with those challenges supply appears current.

Last week’s estimated harvest of 2.52 million hogs was 145,000 head higher than the previous week and 101,000 more than the same week a year ago. Last year’s weekly total was impacted by extreme cold weather. Neither farmers nor packers are seeing favorable margins. This week’s World Supply and Demand Estimates dropped Argentina’s expected soybean production by 7 million metric tons. The decrease in world soybean supply will raise production costs even more.

The pork cutout value was about 58 cents lower last week, ending Friday at $85.57, although it had increased to $87.66 by Wednesday of this week. An increase in demand would be welcomed to improve margins. The latest export sales data was disappointing with purchases of 22,100 metric tons.

Cash lamb prices improve

Cash lamb prices were steady to higher this week. Last week’s harvest estimate was 35,000 sheep and lambs — 1,000 more than the previous week, and 3,000 greater than the same week last year. The lamb cutout value was $3.50 lower by the end of last week at $524.84. Packers continue a higher harvest pace in preparation for the Easter holiday.

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 $172/cwt. The Holstein steer market was mixed to mostly steady ranging from $114 to $142/cwt, with the top end bringing $142 to $148 and some packages above. Silage fed, under finished or heavy dairy breed steers brought $78 to $113/cwt. Dairy x Beef steers were bringing $107 to $154/cwt.

Cows were mixed. A bulk of the cows brought $65 to $85/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 higher, bringing $75 to $200/cwt with heavier, well-cared-for calves selling up to $275/cwt. Beef and Beef Cross calves were selling to $400/cwt. Shorn market lambs were bringing $125 to $147/cwt with reports of some lambs to $175/cwt.