Hog Harvest Strong as Draw Closer

Prepared and written by Jeff Swenson. 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. Contact Jeff at [email protected]

The latest USDA Cattle on Feed report was released on Friday, December 18 and was in line with trade estimates. The number of cattle on feed of 12.0 million head was only slightly more than December 1, 2019. Placements during November were 8.9 percent less than November of 2019. Marketings were at 98 percent compared to last year. The week started with cash cattle prices mostly steady to lower with some cattle feeders opting to hope for higher prices in January. The unpredictability of winter weather can make that a risky option. The average carcass weight for a beef breed steer last week was 891 pounds, just five pounds above last year. The extra five pounds does cause additional tonnage, but is the lowest average weight we have seen in months. The beef carcass cutout value was higher the beginning of this week after two weeks of losses. According to the Sterling Profit Tracker, margins for feedlot operators fell into the red last week. Margins dropped by $20.00 per head, erasing the previous week’s $10.00 profit and causing a $10.00 per head loss.  

Estimated hog harvest under federal inspection last week was 2.792 million head – a strong number heading into the holidays. Cash hog prices were lower last week. With packers dark on Friday, prices will likely be steady at best. The Sterling Profit Tracker reported farrow to finish producers saw their margins drop $5.00 per head with profits last week estimated at $1.60 per hog. The USDA will release a Hogs and Pigs report Wednesday afternoon (12/23.) It’s expected that sow inventory will be 2 percent below a year ago and farrowing intentions will also be less than year ago levels. Demand, both foreign and domestic, has been key in the pork market. China has said their pork production is nearing pre-African Swine Fever levels, but that may be overstated since they are still importing large amounts of pork.

The USDA released its latest Cold Storage report Tuesday (12/22.) Red meat in storage continues to be lower than last year’s level, down 12 percent compared to November 30, 2019, but most of the difference is due to pork. Beef in freezers was up 2 percent from the previous month and 7 percent higher than last year. Frozen pork supplies were down 7 percent from the previous month and down 28 percent from last year. Total frozen poultry supplies on November 30, 2020 were down 16 percent from the previous month and down 10 percent from a year ago. Total stocks of chicken were down 3 percent from the previous month and down 10 percent from last year. Total pounds of turkey in freezers were down 48 percent from last month and down 12 percent from November 30, 2019.

Dairy cow harvest is running 5.3 percent behind last year so it’s no surprise the nation’s dairy cow herd is growing. Milk production in Wisconsin during November was 2.49 billion pounds and that was up 3 percent compared to last November. The average number of dairy cows was 1.26 million head, up 2,000 head from October 2020, but down 5,000 head compared to November 2019. Production per cow was 60 pounds higher than a year ago. Milk production in the 24 major milk producing states was 3.1 percent higher than November 2019. The number of dairy cows in the US in November averaged 9.41 million head, 62,000 head more than November 2019, and 12,000 head more than October 2020.

High yielding Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were mostly steady, bringing $102.00 to $106. 00/cwt. High-yielding cattle with an overnight stand were up to $107.50. Choice and Prime Holstein steers were lower at $90.00 to $94.00/cwt. Dairy/Beef cross steers and heifers continue to vary greatly in price dependent on whether they show more dairy or beef breed traits. A bulk of lots fell into a range of $90.00 to $97.00/ cwt this week. Cows were steady to $1.00/cwt lower at $37.00 to $54.00/cwt. Blemish free cows in fleshier condition were selling in the upper $60.00s/cwt. Dairy breed bull calves were lower again this week $40.00 to $165.00/head. Market lambs were steady to higher with heavier lambs bringing up to $180.00/cwt.