Swenson: Packers step up purchasing pace in fed cattle market
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.
Fed cattle ended last week higher. That momentum carried into this week with packers stepping up the purchasing pace ahead of Good Friday.
Cattle weights continue to be lower than year ago levels, adding to the decrease in beef supply. News of mid-week higher bids caused the Live Cattle Futures market to open sharply higher on Thursday. While the Choice carcass cutout value was 55 cents lower last week, ending Friday at $282.07, it has worked steadily higher this week, creating added incentive to packers.
Higher wholesale prices are being attributed to retailers concerned about being caught short as warmer weather approaches. It may be too early to say the seasonal low in both cash and future prices have been put in, but a strong argument for that case could be made.
The start of the grilling season in earnest should help underpin beef prices. Last week’s harvest was estimated to be 651,000 head, making it 25,000 head higher than the previous week and 12,000 higher than the same week last year.
Feeder Cattle futures contracts followed the Live Cattle market higher, spurred further by lower Corn futures prices. Feeder Cattle nationwide were called $2 to $5 higher at last week’s auctions. Tighter Feeder Cattle supplies are becoming increasingly evident.
Pork market struggling to find support
Last week’s USDA Quarterly Hogs and Pigs report showed total hog inventory up slightly as of March 1. The breeding herd is up half a percent. Market hog inventory is only slightly higher than last year, but 2% lower than last quarter. Market hogs weighing over 180 pounds were 2.1% higher, while the lighter weight categories were down fractionally.
Farrowing intentions for both the March through May and the June through August periods are lower. This has left some analysts and economists curious as to whether intentions are underreported by some producers given the modest growth in sow numbers.
The pork carcass cutout ended last week at $77.28, making it $1.26 lower on the week and making it $25.67 lower than this time last year. Market hog prices are about $40/head lower compared to a year ago. Estimated harvest last week was 2.497 million, 40,000 more than the previous week and 58,000 above the same week a year ago.
The pork market as a whole is struggling to find support, although the most recent weekly trade data was positive as 53,900 metric tons of U.S. pork was sold to foreign buyers. China and Mexico were the leading purchasers.
Market lamb prices rebound
Market lambs were mostly higher last week with prices now level with the five-year average. Wholesale prices were lower, however, with the carcass cutout value falling $8.61 last week ending Friday at $510.98. Retail lamb activity was predictably higher last week. Lamb features offered more ad space for Rack, Bone-In Leg, Boneless Leg and Shank/Butt.
Last week’s harvest estimate of 38,000 head was 1,000 more than the previous week, but was 4,000 less than the same week last year. This marks the second consecutive week of lower harvest numbers compared to 2022 and just the second time it has happened this year.
State livestock market roundup
Fed Cattle prices at Wisconsin and surrounding state auction markets were higher. High-yielding, high-grading cattle brought $135 to $165/cwt. Groups of high Choice and Prime steers and heifers sold from $162 to $172/cwt with some from $173 to $178. The Holstein steer market was steady to higher, ranging from $114 to $144/cwt with the top end bringing $144 to $150. Silage fed, under finished or heavy dairy breed steers brought $74 to $114/cwt. Dairy x Beef steers were bringing $110 to $158/cwt.
Cows were higher. A bulk of the cows brought $68.00 to $92.00/cwt with some selling to $100/cwt and above. Doubtful health and thin cows were bringing $68/cwt and down. Dairy breed bull calves were higher, bringing $100 to $300/cwt with some heavier, well-cared for calves selling higher. Beef and Beef Cross calves were selling to $500/cwt with a few higher.
Shorn market lambs were bringing $125 to $150/cwt with reports of some selling to $170/cwt. Some packages of lighter lambs sold to $250/cwt.