Recent USDA slaughter report impacts cow 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.
Last week saw fed cattle prices diverge between the southern and northern U.S. Cattle in the north were priced nearly $3.00/cwt higher as feedlot operators hoped to cover the higher cost of feeding cattle during challenging winter weather. Asking prices in the south were higher at mid-week as feedlot operators there hoped to come closer to the northern bids.
The USDA released a monthly slaughter report last week. February beef production totaled 2.5 billion pounds, down 7% from February 2022. The decrease was the result of 5.1% fewer cattle harvested, and weights being 1.9% lower. Beef cow harvest was down 13.6% from last year’s high liquidation rate, while dairy cow harvest increased nearly 1%.
The lower numbers have impacted cow prices. The cutter cow cutout value ended last week at $215.50, compared to $192.97 at the end of December. The Choice beef cutout value was $279.88 last Friday, down $3.30 on the week. Harvest last week was estimated at 626,000 head, 5,000 less than the previous week and 31,000 below the same week last year.
According to the Sterling Profit Tracker, the estimated total cost for finishing a steer last week was $2,112 per head, up 16% from last year’s estimate of $1,771 per head. This cost includes the purchase price of the steer.
Fewer sows in the pipeline predicted
The USDA will release a quarterly Hogs and Pigs report this week after this update has been completed. Sow harvest is up the first two months of this year, and could mean fewer sows, although there are many questions regarding upcoming market hog supply.
February pork production was 2.2 billion pounds, making it 0.5% lower than a year ago. Harvest was up from last year, but weights were 2 pounds per hog lower.
Wholesale prices have taken a beating with all primals showing weakness. Belly prices are their lowest since April 2022. The pork carcass cutout value finished last week at $81.05, a drop of $4.82. The estimated harvest of 2.457 hogs was 35,000 less than the previous week and 46,000 above a year ago.
The Sterling Profit Tracker estimates farrow-to-finish hog producers saw losses of $11 per head last week, about $3 more than the previous week. Pork producers saw profits of $80 per head the same week a year ago. Pork exports are higher than a year ago, providing some hope for higher hog prices.
Lamb production up
February lamb and mutton production totaled 10.1 million pounds, making it 9% higher than a year ago. Harvest was 8% higher, and the average live weight of 129 pounds was 1 pound higher than February 2022. The increase in production has pressured the market with lamb prices below both last year and the five-year average. Last week’s harvest estimate of 37,000 was 6,000 head higher than the previous week. That total was 1,000 head less than the same week last year, making it the first time this year the weekly total was less than the corresponding week in 2022. The gross lamb cutout value was $519.59 last Friday, marking a $4.15 loss on the week.
State livestock market roundup
Fed cattle prices at Wisconsin and surrounding state auction markets were steady to higher. High-yielding, high-grading cattle brought $135 to $162/cwt. Groups of high Choice and Prime lots sold from $162 to $172/cwt. The Holstein steer market was 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 $114/cwt. Dairy x Beef steers were bringing $107 to $155/cwt.
Cows were steady. A bulk of the cows brought $62.00 to $88.00/cwt with some selling to $100/cwt and above. Doubtful health and thin cows were bringing $65/cwt and down. Dairy breed bull calves were higher, bringing $100 to $250/cwt with heavier, well cared for calves selling up to $300/cwt.
Beef and Beef Cross calves were selling to $500/cwt, with a few higher. Shorn market lambs were bringing $135 to $150/cwt with reports of some selling to $200/cwt and reports of a few packages of light market lambs selling higher.