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 trade was slow last week for a variety of reasons. Feedlot operators in Nebraska and Iowa were more focused on keeping cattle alive, as heat indexes rose to 116 degrees, than marketing. If early reports are accurate, death totals will rival those seen during the worst winter storm losses. The heat across the country’s midsection postponed summer grilling plans, causing beef demand to slacken.
Packers were reluctant to raise bids for cattle as a result of tight or negative margins and fewer orders to fill. These factors were reflected in last week’s estimated harvest of 619,000 head, which was 5,000 below the previous week and 47,000 less than the same week last year. Only the holiday weeks of Memorial and Independence Days, the weeks prior to and after Easter, and one week in February when cattle movement was hampered by winter storms posted lower totals.
Overall, the cash market was called steady to $1 lower last week. The Choice beef cutout was lower again, averaging $303.32, a decline of 75 cents. $300 is a key support level, and while the cutout showed weakness to open this week, retailers have expressed interest in placing orders to meet the expected Labor Day weekend demand. The most recent USDA Cold Storage report showed frozen beef supplies 20% lower than a year ago.
Cattle Prices
Beef breed fed cattle were mostly steady at Wisconsin and surrounding state auction markets, bringing $150 to $180/cwt. High Choice and Prime steers and heifers brought $180 to $188/cwt. The Holstein steer market was fully steady to $1 higher, from $126 to $163/cwt, with a few higher. Silage fed, under finished, or heavy dairy breed steers brought $75 to $125/cwt. Dairy x Beef steers were bringing $126 to $172.
Cows sold higher than last week. A bulk of the cows brought $75 to $108/cwt with beef breed, fleshier cows selling to $120/cwt., and a few above. Doubtful health and thin cows were bringing $75/cwt and down.
Dairy breed bull calves were steady bringing $100 to $300/cwt with some heavier, well-managed calves selling to $350. Beef and Beef Cross calves were steady, selling to $600/cwt. Market lambs were steady, from $160 to $185/cwt with a few to $190/cwt.
Hogs
Cash hogs were another $2 higher last week. The higher prices are welcomed, although the increase has not kept pace with rising feed, labor, and other expenses. The National Pork Producers Council (NPPC) released an economic update for the third quarter. The report noted that high production costs are still affecting farmers. Average costs and breakeven levels were 9% higher than one year ago, along with an increase of 60% from three years ago. Domestic consumption has been limited by lower in-home food spending. Retailers have been featuring pork more often in recent weeks and have aggressively run specials on bacon.
In a recent report, Brian Earnest, lead animal protein economist for CoBank, said “Roughly two-thirds of domestic pork winds up in processed items like bacon, sausage, or hams, which have performed relatively well in recent years. However, key meat case items like pork loins are struggling to gain the same attraction that boneless skinless breast meat or ground beef enjoy.”
Per-capita pork consumption hasn’t grown but has held steady at about 50 pounds per year for the past decade. Last week’s estimated harvest of 2.392 million was 76,000 more than the previous week and 100,000 head above last year.
The pork cutout was up 57 cents last week to average $114.24. Exports have been a bright spot for the pork sector, although rebounding sow numbers in China have caused a decline in pork sales to that country. The latest USDA Cold Storage Report indicates exports have chipped away at frozen pork supplies. Pork in storage was 490.2 million pounds, 9.1% lower than this time last year.
Lamb
Cash lamb prices were called anywhere from steady to $20 lower last week. Movement of lamb through retail chains has improved somewhat, with the lamb cutout value $1.29 higher to end last week at $515.61.
Retailers continue to feature lamb in higher consumption regions of the country. Lamb and mutton in cold storage is 9% higher than a year ago, reflecting a slowdown in export sales.
Last week’s estimated sheep and lamb harvest was 32,000 head. That was 1,000 less than the previous week and 1,000 head higher than the same week last year.
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