The following report was prepared and written by Jeff Swenson, DATCP’s livestock and meat specialist. This report draws information from several sources, including trade publications, radio broadcasts, agricultural news services, individuals involved in the industry as well as USDA reports.
Cattle
The cattle sector had a lot of data to digest last week and all the information points to even tighter supplies ahead. The USDA July 1 Cattle Inventory report showed all cattle and calves inventory in the U.S. was 97.3% when compared to a year ago. The beef cow herd continues to shrink as the July 1 inventory was 97.4% compared to a year ago. Dairy cow numbers remained unchanged. The report also showed beef heifer inventory kept for replacement was 97.6% compared to last year.
The latest Cattle on Feed Report was released last Friday. Total cattle in feedlots were nearly 2% less than July 1, 2022. For the second month in a row, placements were higher than pre-report estimates, coming in 2.7% more than last June. Dry conditions in areas of cow-calf country have forced some farmers and ranchers to wean calves early. This is causing lighter calves to move into feedlots earlier than normal. Heifers made up 39.9% off all cattle in feedlots. Coupled with the decrease in beef heifers kept for replacement, all indications are that rebuilding continues to be put off due to dry conditions and profitability concerns.
The latest USDA Livestock Slaughter report showed beef cow harvest in June was 13.7% lower than a year ago, with year-to-date harvest down 11.6%. While lower, those numbers are being compared to the high level of contraction and liquidation experienced last year. Year-to-date beef production is trailing last year by 4%.
Private treaty sales developed in the north last Thursday at higher money but the standoff in the south continued as feeders there refused the steady bids offered. The Choice beef cutout value averaged $304.07 last week, $5.88 lower for the week. The weekly harvest estimate was 628,000 head, putting it 5,000 lower than the prior week and 35,000 below last year.
Hogs
Pork production has begun to moderate when compared to last year. The USDA Monthly Livestock Slaughter report showed pork production 2% lower than in June 2022, mostly due to lower live hog and carcass weights. The average live weight of 284 was four pounds lower than last year, while carcass weights also dropped four pounds to average 211.
June harvest was 1% below last year, but year-to-date hog harvest is still 1.7% higher than 2022. January through June pork production is 0.9% above the same period last year. Pork production in Wisconsin increased in June to buck the national trend. Wisconsin leads the nation in sow harvest, and the report indicates more sows came to market than a year ago. Harvest was up 6,000 head in the state and the average live weights increased six pounds to further push production higher.
Cash hogs were $1.80 higher last week. The pork cutout value continues to be pulled higher by bellies, averaging $113.67 last week for a gain of $2.36. Hog futures prices showed weakness at mid-week last week but managed a Friday reversal. The Augurs Lean Hog contract gained $5.00 on the week to close at $100.68. Last week’s estimated harvest of 2.316 million hogs was 12,000 head lower than the previous week and 21,000 higher than the same week last year.
Lamb
Lamb and mutton production was down 5% from June 2022. Sheep and lamb harvest totaled 177,300 head, 2% above last year. The average live weight was 122 pounds, down nine pounds from June a year ago.
Market lambs were lower last week after showing impressive gains the prior week. Traditional market lambs were $7 to $10/cwt lower while light market lambs were steady to $20/cwt lower. Harvest pace has remained steady this summer with last week’s estimate at 33,000 sheep and lambs. That is 1,000 head higher than both the previous week and the same week last year. The lamb carcass cutout was $2.58 higher than the previous Friday at $514.32.
Feedlot inventories and the current harvest pace point to lower fed lamb supplies ahead, but so far that scenario has not materialized. Lamb retail activity was higher last week. Lamb features offered more ad space for Shoulder Blade Chops and Shoulder Round Bone Chops. Retail lamb prices were lower than the previous week on all cuts.
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