Cattle Supply Getting Tighter

The following meat market update was prepared and written by Jeff Swenson, DATCP livestock and meat specialist. The 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. Edited by Mid-West Farm Report.

Cattle

If recent runs at local auction markets are used as a measure, the supply of fed cattle is getting tighter. The year is young, but so far, cattle harvest is 5.3% below 2023. Much of the drop can be attributed to a decline in cows being marketed. Fewer cows being sold have brought higher prices. Cow prices typically move higher seasonally until late May or early June. The number of dairy cows marketed has also been lower, even with lower milk prices currently.

Last week’s estimated harvest of 599,000 head was up 6,000 from the previous week but 27,000 lower than a year ago. Steers made up 46.7% of the total, with 31.3% of the weekly harvest being heifers. The remainder was made up of 20.6% cows and 1.5% bulls. Negotiated trades began slowly again this week. Wholesale beef prices are on the rise, with the Choice beef cutout value up $4.68 last week to average $303.21. The Select carcass cutout averaged $295.74 last week, having gained $1.56. Even with the narrow Choice/Select spread, packers are still seeking cattle likely to grade Choice or above.

It will be weeks before we know what the impact the wildfires in Texas and Oklahoma will have on the cattle market long-term. Thousands of miles of fence have been destroyed and there are reports of cattle missing, with many presumed dead. Last week’s USDA Cold Storage report showed frozen beef supplies 11% lower than this time last year.

Cattle Prices

Fed cattle prices are steady to $1 higher this week at Wisconsin and surrounding state auction markets. High Choice and Prime beef breed steers and heifers brought $171 to $179/cwt, with some to $186/cwt and a few higher. Choice steers and heifers ranged from $162 to $171/cwt, with mixed grading and those likely to grade Select bringing $152 to $162/cwt. Holstein steers were steady to higher. High grading steers brought to $152 to $160/cwt, with some higher. Lower grading steers brought $125 to $151. Silage fed, under finished, or heavy dairy breed steers brought $75 to $125/cwt. Dairy x Beef steers were higher, bringing $128 to $177/cwt, with a few higher.

Cows were steady to higher. A bulk of the cows brought $84 to $110/cwt with some fleshier dairy and beef cows selling to low $120s/cwt. Doubtful health and thin cows were bringing $84/cwt and down.

Dairy breed bull calves were fully steady, bringing $200 to $400/cwt with some heavier, well-managed calves selling to $660. Beef and Beef Cross calves were higher selling up to $900/cwt.

Hogs

Domestic pork demand is improving with export demand continuing strong. The pork cutout averaged $91.57 last week. Although that was 32 cents lower, all primals but bellies were higher. Recent strength in loins has been a welcomed development.

Cash hogs were called another 70 cents higher last week and were higher to start this week. There continues to be some back and forth in Lean Hog futures, but the June and July contracts continue to trade above $100/cwt.

The USDA estimates that 2.549 million hogs were harvested last week. That is 29,000 less than the week prior and up 26,000 from a year ago. Harvest in 2024 is running 1.3% above last year. Pork in cold storage is down 9.8% compared to this time last year.

Net export sales had another good week with China being the lead buyer. Feeder pig prices have been increasing this year. The USDA reported a 40-pound feeder pig composite price (the weighted average of both formula and cash sales) of $85.45/head. That compares to $44.68 on January 5 of this year.

Lamb

Holiday demand is helping the fed lamb market. The lamb carcass cutout value was higher last week and was $471.06 last week. Wholesale leg prices have steadily increased and are above both last year and the five-year average. Traditional market lambs were steady to $2/cwt higher with light lambs up to $10/cwt higher.

Harvest pace remains higher than this time last year. The estimated harvest of 41,000 sheep and lambs was 1,000 head higher than the previous week and 6,000 more than the same week a year. 2023 saw an increase in sheep and lamb harvest, but lighter weights kept production lower. So far this year, harvest is up 2% while lamb and mutton production is running 5.3% above a year ago. Market lambs were steady at $170 to $200, with some to $250/cwt.