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]
A new report from Cobank says feed costs for livestock and poultry producers will be 12 percent higher in 2021, and that’s the highest year over year increase since 2011. Will Sawyer, lead animal protein economist with CoBank wrote, “the higher feed costs come at a challenging time, as meat and poultry industry margins have been pressured by weak prices in 2020 due to COVID-19. Average producer margins for cattle, hogs and broilers fell into negative territory this year after the pandemic disrupted foodservice demand and drove widespread meat plant slowdowns and shutdowns.” Cobank is part of the US Farm Credit System.
Cash cattle started lower for the second straight week. Holstein steer prices had been holding steady compared to their beef counterparts recently, but were $2.00/cwt lower this week at area auction markets. Most cash trade will likely wait until the end of the week to develop. The beef cutout value continues to show weakness, although it’s now about the same as a year ago at this time. The average retail price for beef in November was $6.34/pound, down from its peak in June of $7.56/pound. Average trade estimates are for an on feed number level with a year ago. Placements are expected to be lower than a year ago for the second straight month at 91.5 percent. Marketings estimates average 98.1 percent compared to November 2019. If the placement estimate is accurate, it would mean a tighter supply of fed cattle June and July of 2021.
Hog harvest is running about the same as last year. It’s likely packers are operating at maximum capacity relative to labor availability and shackle space. Supply remains high and there’s likely a backup of market ready hogs to be worked through in the weeks ahead. Last week’s harvest estimate of 2.776 million head indicates the desire to move hogs through the system ahead of Holiday shortened work weeks. Cash hog prices were higher early in the week with wholesale pork prices mostly steady. The average retail price of pork for November was $4.10/pound. The retail pork price is higher for the second month in a row, and while it’s down 3.5 percent from the peak in June, it is 6 percent higher than this time last year. Pork exports sales were impressive to say the least with 84,200 metric tons heading to foreign destinations according to the latest weekly report.
Comfort foods have been popular among Americans spending more time at home in 2020 according to Grubhub, an online and mobile food-ordering and delivery marketplace. Consumers ordered more meat-based dishes this year according to Grubhub’s annual “Year In Food” report with chicken seeing the largest gains. The spicy chicken sandwich was 318 percent more popular, chicken burrito bowls saw 299 percent more orders and chicken wings were 287 percent more popular. Steak quesadillas were 164 percent more popular, and roast beef sandwiches grew in popularity as well by 126 percent. While vegan and vegetarian growth slowed in 2020 to 13 percent compared to 27 percent in 2019, plant-based protein popularity saw a large increase in popularity at 463 percent.
High yielding Choice beef breed steers and heifers at Wisconsin and surrounding state auction markets were $1.00 to $2.00/cwt lower at mid-week bringing $101.00 to $105.00/cwt. There were very few reports of cattle bringing more, but some high-yielding cattle with an overnight stand brought up to $107.00/cwt. Choice and Prime Holstein steers were lower, bringing $91.00 to $95.00/cwt. Some Holstein steers sold at $96.00 to 97.00/cwt., but that was on exceptional lots. Cows were lower at $38.00 to $52.00/cwt. Blemish free cows in fleshier condition were selling in the $60.00s/cwt. Dairy breed bull calves were lower, bringing $35.00 to $160.00/head. Market lambs were lower with heavier lambs bringing up to $160.00/cwt. Lighter weight lambs brought up to $200.00/cwt. Feeder cattle prices have been uneven, but demand has been good for high-quality, properly handled calves. Please check with your local market managers or selling agents for possible Holiday schedule changes.