The following report was prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. This 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.
Cash cattle backed off their record highs last week. This may bring into question the short-term price trajectory of cattle prices, but history sheds some light on current conditions. Cattle prices typically put in a seasonal high during this time. Mid to late June generally signals what the beef sector refers to as a transition to “burger and hot dog” season, although “burger and brat” season is a more fitting description in Wisconsin.
Consumers tend to taper their grilling of whole muscle cuts heading into Independence Day. The heat during the dog days of summer, the period from July 3 through August 11, often brings lower or sluggish beef demand. It is common for cash cattle prices to decrease by 10% during this point of summer.
The Choice beef cutout gained $15.44 last week, to average $339.93, and has turned lower this week. Wholesale prices are still a source of anxiety for further processors and retailers though, as the cutout is $70.00 higher than this time last year. The retail price of beef in May was 5.3% higher than last year, at $8.08, which is a record.
Last week’s estimated harvest of 634,000 head was 18,000 higher than the previous week and 34,000 below last year. The USDA will release a Cattle on Feed report this week after this Update is compiled. May placements are expected to be higher than 2022, although many analysts believe the larger placement number has been factored into the market.
While cattle prices typically see a seasonal high this time of year, hog prices should be coming off a seasonal low. BLT season can’t come soon enough, as belly prices have been a drag on the pork carcass cutout.
At the retail level, bacon prices are 14% below a year ago. The average retail pork price in May was $4.73, making it 3.2% below 2022. The seasonal trend upward may be underway in the pork sector. Cash hogs were called $2.50 higher last week. The pork cutout value was $3.48 higher last week, averaging $90.13, and is showing impressive strength this week.
The USDA estimates 2.330 million hogs were harvested last week. That is 28,000 less than the previous week and 32,000 less than the same week last year. Hog harvest is still 1.1% higher year-to-date when compared to 2022, with pork production now just .03% higher than a year ago. Harvest numbers are expected to decrease with production becoming more in line with last year before dropping below year ago levels.
Wholesale lamb prices have been under pressure with the cutout ending last week at $508.62. Cash prices on traditional market lambs were higher nationally, while light market lambs were called lower. The supply chain is still dealing with plentiful product. Lamb and mutton production year-to-date is 1.1% higher than last year with harvest 6% higher. Shepherds in the southern U.S. weaned lambs early due to drought last year in an attempt to keep their ewe flocks intact. This likely explains much of the production increase as those lambs move through market. Market lambs were higher, bringing $150 to $192/cwt. Light market lambs were lower and sold to $200/cwt.
Beef breed fed cattle sold steady to $2 lower this week from $146 to $178/cwt. Some groups of high Choice and Prime steers and heifers sold from $178 to $185 with some packages higher. The Holstein steer market was steady from $125 to $155/cwt, with the top end bringing $155 to $159 and some higher.
Silage fed, under finished, or heavy dairy breed steers brought $75 to $125/cwt. Dairy x Beef steers were bringing $120 to $170. Cows were mixed to lower. A bulk of the cows brought $67 to $98/cwt, with fleshier cows selling to $112 and above.
Doubtful health and thin cows were bringing $67/cwt and down. Dairy breed bull calves were sharply higher, bringing $100 to $320/cwt with some heavier, well cared for calves selling to $400. Beef and Beef Cross calves were selling to $600/cwt.
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