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.
This has been a challenging year for pork producers to say the least. Many are saying it is as bad, if not worse than 1998.
Markets improved in July and the first half of August, but much of that momentum was lost last week. Cash hogs were called $5 lower, and the carcass cutout dropped $4.13 to average $107.79.
Last week’s harvest estimate of 2.414 million hogs was 60,000 higher than the previous week. It is also 7,000 more than a year ago. There are reasons to believe the situation will improve, although not necessarily in the short term.
Exports are up this year, even as China increases their production. In a recent op-ed, UW Extension Swine Specialist Jeff Morris, wrote, “On the bright side, exports largely driven by sales to Japan, Korea, and Latin America with growth potential in Central America and South America are up.”
In a National Hog Farmer article, Joseph Kearns of Partners for Production Agriculture, says pork production in the EU is expected to decrease 10% per year over the next 10 years. This is due to economic challenges and an increase in regulations there. This will provide additional opportunities for U.S. exports. Prospects for lower feed costs should come to fruition as well. Corn yields in Wisconsin will no doubt be impacted by drought. However the country’s crop overall is still expected to be large, as is Brazil’s.
We are a month away from the next Quarterly Hogs and Pigs report, although June’s did indicate lower farrowing intentions. Sow inventory and farrowing intentions in the September report will give a clearer picture of future pork supplies.
Sheep and lamb harvest is outpacing last year by 3.4%. Lamb and mutton production is 1.9% below 2022 so far. Live weights averaged 121 pounds last week, compared to 130 a year ago. Sheep carcass weights averaged 62 pounds, 4 pounds less than the same week last year. At mid-year, the lamb carcass cutout was nearly $120 below last year, and $40 less than January 1.
Last week’s gross lamb cutout value was $529.99. The net value (carcass value less process/packaging per cwt cost of $77.00) was $448.99 last Friday, $17.50 over the summer low.
Harvest last week was estimated at 32,000 sheep and lambs. This is 1,000 more than the previous week and 2,000 below the same week last year. Cash lambs were $2-$6/cwt higher with some instances of light lambs up to $20.00 higher.
Market lambs were steady to higher from $125 to $191/cwt with a few to 225.
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