Fed cattle prices slip after setting record highs

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 prices had set record highs for three consecutive weeks but finished last week lower. The USDA released both a monthly Cattle of Feed and Monthly Livestock Slaughter report on April 21. The on feed and placement numbers were higher than expected. The number of cattle in feedlots on April 1 was 95.6% compared to a year ago. Placements in March were 99.4% relative to last year while the average trade guess was 95.2%.

Even with the larger than anticipated placements, the number of cattle on feed is the lowest in 17 years. Heifers made up 38.7% of the cattle in feedlots. That percentage would need to drop to about 31% to indicate herd expansion is taking place.

March beef production was 4.1% lower than the same month in 2022. The lower production was a combination of lower harvest numbers and lower harvest weights. Cow harvest has slowed and was 9.3% below January through March of last year, although it is still outpacing the 2017-2021 average. 

The Choice beef carcass cutout averaged $306.51 last week, a gain of $8.60. The cutout has not yet taken out the next level of resistance of $308. Estimated harvest last week was 622,000 head, making it 9,000 higher than the previous week and 42,000 head lower than the same week last year.

Hog prices continue to languish

The base carcass price for market hogs is $20/cwt lower than last year. Wholesale pork prices are also averaging $20/cwt lower than 2022. Year-to-date hog harvest is 1.7% higher than last year, while year-to-date hog prices are 15% lower.

In a National Hog Farmer article, Ron Plain writes, “During the last eight weeks hog slaughter was up 2.17%. The March Hogs and Pigs report indicated it would be up 1.27%. During this period, hog prices were down 20%. A 20% decline in hog prices for a 2% increase in hog slaughter is a much bigger drop than is normal. Typically, one would expect hog prices to decline 3-4% for each 1% increase in hog slaughter.”

This week’s USDA Cold Storage report showed red meat supplies in freezers 1% below both last month and last year, but most of the decrease was from beef. Pork was 2% higher than February and up 10% compared to March 2022. As one market analysts stated, “The market is well-supplied.”

According to the USDA Monthly Slaughter report, March pork production was up 1.3% from a year ago. Lighter carcass weights were offset by a 1.9% increase in hogs harvested. The pork cutout averaged $78.50 last week, an increase of $1.20. Estimated harvest for the week was 2.459 million, making it 30,000 head higher than the previous week and 83,000 higher than a year ago. Weekly net export sales hit 54,000 metric tons making it a marketing year high.

Lighter lambs take hit

Heavier market lambs were steady last week with lighter lambs sharply lower. Prices for light lambs typically go down this time of year and that seasonality is compounded by a large supply. The average live weight of sheep and lambs harvested in March was down 4 pounds, although head harvested was up 6%. Last week’s estimate of 35,000 sheep and lambs harvested was 1,000 head higher than the previous week and 5,000 lower than the same week last year.

State livestock market roundup

High-yielding, high-grading cattle were steady to mostly lower this week, bringing $140 to $173/cwt. Groups of high Choice and Prime steers and heifers sold into to $180/cwt.  The Holstein steer market was mixed, ranging from $114 to $148/cwt with the top end bringing $148 to $152. Silage fed, under finished or heavy dairy breed steers brought $74 to $114/cwt. Dairy x Beef steers were bringing $112 to $165/cwt.

Cows were steady to $2 lower. A bulk of the cows brought $68 to $93/cwt with some selling higher. Doubtful health and thin cows were bringing $68/cwt and down. Dairy breed bull calves were mostly lower, bringing $100 to $290/cwt with some heavier, well cared for calves selling to $380.

Beef and Beef Cross calves were selling to $530/cwt with a few higher. Market lambs were mixed to mostly steady at $145 to $180/cwt. Lighter lambs were lower. Light lambs sold to $300/cwt. with a few packages higher.