By Jeff Swenson, Livestock and Meat Specialist at DATCP
It feels fitting that fall-like weather has settled on the state with the last traditional grilling holiday of the year behind us. Most agree a slower transition to lower temperatures would have been welcomed. There are still plenty of fed cattle available for packers to choose from this month. This caused a gap between asking price and bid price which resulted in slow cash sales at the beginning of the week. Carcass weights continue to increase, climbing three pounds over the previous week to average 888.9. September will be a challenge, but there will be fewer market ready cattle in the fourth quarter. Given deteriorating pasture conditions, there are feeder calves and yearlings needing to move into feedlots from drought impacted areas of the country. With the increase in supply, there were weaker feeder cattle prices last week and the pattern of lower prices has continued. Cleaning up the inventory of heavy cattle to make room in feedlots is a must, and progress will be made in the last three months of the year barring any setbacks.
Margins for farrow to finish operators improved by $7.00/hog last week, but pork producers are still running in the red. Exports to China have been strong. Dan Bauer, senior market analyst with Provimi said on a Feedstuffs Precision Pork Market Update that muscle cut exports to China are 266 percent over last year and 27 percent over 2018 year to date. China is motivated to import pork as prices there reached their highest of 2020 so far during the last week in August. The Iowa Pork Industry Center and the Iowa Pork Producers Association wrapped up their four week Producer Recover Webinar Series Wednesday (9/9.) Speaker Pat VonTersch, owner of Professional Ag Marketing, predicts pork sales to China will be lower in 2021 as large hog farms are constructed there in an effort to rebuild their pork herd. Bauer noted that pork production is setting up to be 2 percent lower in the US during 2021 when compared to this year. As to the backlog of market-ready hogs, Bauer stressed the importance of continued Saturday hog harvests, but also warned of worker fatigue, noting packing plant employees have been working every Saturday since June. On a separate note, Lean Hog futures were locked limit up during the writing of this Update due to news of an African Swine Fever positive wild boar found in Germany near the Poland border. South Korea has tentatively said they will block imports of pork from Germany on the news and other Asian countries may follow. Germany is the largest pork producing country in the EU. If imports from Germany or the entire EU are indeed stopped by some countries, US raised pork will see increased export sales. Keep in mind futures markets always react to headlines, then often see a correction when it’s learned what the news really means for prices.
Wisconsin had some areas that were considered abnormally dry on September 3, but it’s likely they have gotten rain since then. The latest US Drought Monitor report indicated that 39.4 percent of the country was experiencing some level of drought. The latest USDA Crop Progress and Condition report showed 46 percent of pastures in poor to very poor condition and just 22 percent rated good to excellent. Wisconsin pastures were 59 percent good to excellent, down 3 percent from the previous week. Derrell Peel, Oklahoma State University Extension livestock marketing specialist, recently commented that 50 percent of pastures in the western region are in poor to very poor condition and 42 percent of pasture in the Great Plains and southern plains are rated poor to very poor. Peel notes that 41 percent of the cow herd are in states that have at least 40 percent of pastures rated poor to very poor. It’s difficult to know if any increased culling or herd liquidation will result from the dry conditions. Beef breed cow harvest is already running 3.3 percent higher year-to-date when compared to 2019.
High yielding Choice beef breed steers and heifers were mostly $96.00 to $103.00/cwt to start the week at Wisconsin and surrounding state auction markets. Sales from $105.00 to $108.00/cwt were reported by mid-week. Holstein steers were $92.00 to $96.00/cwt, but also saw higher prices later in the week with some selling to $99.00 and even $100.00/cwt. Cows were mostly $45.00 to $59.00/cwt. Higher milk prices are causing dairy cows to come to market thinner, but blemish-free, fleshier cows did sell from $60.00 to 71.00/cwt with some higher. Dairy breed bull calves were mostly $60.00 to $145.00/head with the best prices paid for heavier, properly cared for calves.
Leave a Reply