Production agriculture continues to struggle amid current market conditions. According to the Sterling Beef Profit Tracker, cattle feeders were losing $254 per head last week. During the first week of July 2019, feedlot operators were experiencing a $29 per head profit. Prices were mixed Monday, but then worked higher. Holstein steers at Midwest auction markets were higher at midweek seeing strong demand. There is talk that we are reaching the end of the heavyweight cattle (those cattle that were at, or reaching market weight when packer challenges began.) That would be 30 days sooner than expected. Easing back cattle weights should help more cattle move through the system and moderate beef supply. There are also indications that the supply of cattle in the Cornbelt is tightening. This would be welcomed news heading into the heat of summer when demand for beef typically weakens. Retailers are planning to feature beef in the late summer, early fall and that may help hold market prices at current levels, although cattle prices are usually under pressure this time of year.
Farrow to finish pork producer margins continue to erode, at negative $65 per hog. A year ago farrow to finish operators were seeing a profit of $26 per head. Estimates vary, but there is still a 2.5 million hog backlog to work through. With no setbacks, slowdowns, or closures at the packer level, the backlog could be behind us by mid to late September. Pork cutout values have increased, driven by the price of boneless fresh hams. Boneless ham production has slowed due to a lack of labor, according to industry analysts. Butcher hog weights are still higher than this time last year, but are coming down as the front end of the backlog is worked through.
Red meat exports were down in May. Production disruptions in the U.S. supply chain peaked in early May, and trading partner economies slowed amid stay at home orders. May beef exports were 33 percent lower than a year ago in volume at 79,280 metric tons and fell 34 percent based on value to $480.1 million. Beef exports were higher than a year ago to Hong Kong and China, but lower to most other countries. Exports accounted for 12.5 percent of total beef production in May. Beef export value per head of fed slaughter averaged $282.48 in May, down 10% from a year ago. May pork exports were 12 percent higher than a year ago at 243,823 metric tons, but down 13 percent from the 2020 monthly average of the first quarter 2020. May exports increased year-over-year to China, Hong Kong, Taiwan and Vietnam, but trended lower to Mexico, Japan, Canada and South Korea. Exports accounted for 36.2 percent of total U.S. pork production. Export value per head slaughtered averaged $72.30 in May.
The cash cattle market was active this week. Packer bids were within a wide range. Fed beef breed steers and heifers were called $90.00 to 95.25/cwt in the southern U.S. and $95.00 to $101.50/cwt in the Cornbelt. At auction markets in Wisconsin, Minnesota and Northeast Iowa, the best lots of beef breed steers and heifers brought $95.00 to $101.00/cwt. There were some selling to $105.00. Those cattle were typically delivered to the auction market the evening before sale day. There is also demand for cattle that have not received implants with some packers paying a premium for them. Holstein/Dairy breed steers were higher this week at $88.00 to $92.00/cwt with active bidding midweek seeing some lots to $95.00/cwt.
There has been good demand for market cows, both dairy and beef breeds. Unblemished, healthy cows carrying some condition have been selling in the $62.00 to $70.00 range. Most cows are falling in a range from $42.00 to $60.00/cwt. Slow, thin cows are selling below $40.00/cwt. Bull calves are still seeing good demand with the healthiest calves weighing over 100 pounds bringing $50.00 to $170.00 per head.
Replacement dairy cattle have seen improved demand with better cows bringing $1300 to $1500/head. There was a report of a whole herd dispersal with cows selling to $2000/head.