Pork Producers Face 6th Consecutive Month Loss

The following report was prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. This 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.

The latest USDA Cattle on Feed report numbers were within expectations. Cattle in feedlots on May 1 totaled 11.6 million head, 3.4% lower than a year ago. Placements during April were 4.2% less than last year. Year-to-date placements have totaled 7.409 million, making it 400,000 head below last year.

Fed cattle marketed was 10% below April 2022. Cash cattle started the week steady to lower across the U.S., but packers needed to increase their bids by mid-week to cover their short-term needs. Fewer cattle have been moving in Wisconsin as farmers concentrate on field work.

Holstein steer prices have been higher as packers hope to entice more black and whites to the market. Harvest pace has been fairly steady with last week’s estimate of 642,000 head about 4,000 head less than the previous week, but 35,000 below a year ago. Carcass weights and cow harvest remain two areas to watch. Weights have been dropping, further impacting beef supply. Cow harvest year-to-date is 11% lower than 2022.

While the number of cows heading to market is decreasing, it still isn’t at a point that indicates herd rebuilding. The Choice beef cutout value has dropped below $300. The weakness may be more a result of retailers having filled their Memorial Day weekend needs rather than weakening demand. This week’s USDA Cold Storage Report showed total pounds of beef in freezers down 6% from the previous month and down 16% from last year.

Pork cutout values have been stronger, posting a gain of $1.65 to average $83.86 last week. The cutout value has averaged $81.60 this year, more than 20% below last year. The more expensive primals have been showing the greatest weakness.

Iowa State University economists estimate pork producers lost $49.47 per market hog sold in April, making it the sixth consecutive month of losses. Market hog prices are at their lowest level since January 2021. Last week’s estimated harvest was 2.408 million hogs. That was 40,000 more than the previous week and 5,000 head more than a year ago.

The latest USDA cold storage report showed frozen pork supplies up 6% from the previous month and up 6% from last year. Stocks of processing cuts showed the largest increase. Pork bellies in freezers were up 5% from last month and up 39% from last year. Ham supplies are 39% higher than last month and 20% higher than a year ago.

Market lamb prices were mixed last week, with the lamb carcass cutout value showing a modest increase to $521.57. Harvest was estimated at 35,000 sheep and lambs last week, making it even with the previous week and 5,000 head more than the same week last year. Lamb and mutton in cold storage was 5% below last month and even with April of last year, according to the latest USDA Cold Storage Report. 

High-yielding, high-grading cattle were mostly steady this week. Cattle with overnight stands and well managed cattle were again met with strong demand. Beef breed fed cattle sold from $142 to $174/cwt. Groups of high Choice and Prime steers and heifers brought up to $180/cwt with a few above. The Holstein steer market was steady to higher, ranging from $122 to $155/cwt, with the top end bringing $155 to $160. Silage fed, under finished, or heavy dairy breed steers brought $74 to $122/cwt. Dairy x Beef steers were bringing $115 to $170 cwt.

Cows were $3 to $5 higher. A bulk of the cows brought $75 to $105/cwt with fleshier cows selling to $112 and above. Doubtful health and thin cows were bringing $75/cwt and down.

Dairy breed bull calves were steady, bringing $100 to $250/cwt with some heavier, well cared for calves selling to $325. Beef and Beef Cross calves were selling to $550/cwt. Market lambs were mixed, bringing $155 to $192/cwt. Light lambs were mixed and sold to $250/cwt.