Prepared and written by Jeff Swenson, DATCP Livestock and Meat Specialist. The Market Update pulls information from multiple sources including trade publications, radio broadcasts, agricultural news services, people in the industry, and USDA NASS and AMS reports.
A USDA report on feeding cattle was released on Friday, September 25, 2021. The on-feed and marketing numbers were close to the estimates in the previous report, but the placement total surprised at 2.3 percent over August 2020. The futures markets viewed that number as declining and were working lower at the beginning of the week.
The total feeding of cattle on September 1, 2021 of 11.2 million heads is about 1 percent lower than a year ago. However, it is still the second highest stock since the report began in 1996.
The weight of the cattle placed does not suggest that the cattle are moving to the feeding grounds early due to the drought, but it would be difficult to argue that the drought in the cattle land did not affect the placements.
The cattle harvest was 46,000 head in August than the same month in 2020. In the short term, cattle supplies are becoming scarcer, but the recent weekly cattle harvests have made it a challenge to keep the feedlots updated. The total of 641,000 heads last week was 16,000 fewer than the previous week and 14,000 fewer than the same week last year.
Total beef production in August was 2.36 billion pounds, 1 percent more than the previous year. The total head of cattle harvest was 3 percent higher than in 2020. The dressing weight was 1.8 percent lower than last August.
Beef cuttings lost $ 11.25 last week, though they’re still $ 92.00 higher than they were at that time a year ago. The beef harvest in August was 46,000 higher than in the same month in 2020.
Report sends shock waves through the pig industry
The latest USDA Quarterly Hogs and Pigs Report, released on September 24, 2021, sent shock waves through the pork complex. The breeding herd is estimated at 6.19 million animals, 2 percent less than in the previous year. The market for pig herds was 4 percent lower than at the same time last year and 1 percent higher than last quarter. The pig harvest from June to August was 6 percent lower than the previous year.
We usually see a small increase in the breeding herd at this time of year, so 2021 will counteract this seasonal trend. Lean hog futures contracts responded by increasing the closing limit on Monday and working higher through the middle of the week. Cash hogs were lower, however, and the carcass cutout shows weakness.
Packers had strong weekly harvests, estimated at 2.578 million head last week. That is 41,000 more than a year ago and 28,000 fewer than in the same week last year. Pork production in August was 5.4 percent lower than in the previous year, the harvest 4.5 percent lower than in 2020.
The shadow of African swine fever has tarnished optimism, but domestic and international pork demand remains strong. This week’s rally in futures could give producers an opportunity to take advantage of higher contract prices.
Scarce lamb supplies continue
Lamb and mutton production was 10.3 million pounds, 6 percent less than in August 2020. The sheep harvest was 176,400 heads, 1 percent less than the previous year. The average live weight was 116 pounds, 7 pounds less than August a year ago.
The scarce supply of lambs and the trend towards lighter lambs caused production figures to drop to a record low in August. Veal production also hit record lows. While the harvest was 34,800 head compared to the same month last year, the average live weight was 38 pounds per capita lower.
Government auction market trends
Selected cattle breeds and heifers in Wisconsin and the surrounding state auction markets were steady to declining. High-yielding, high-quality cattle rose $ 108.00 to $ 124.00 / cwt, with highs of $ 125.00 / cwt. Choice and Prime Holstein bulls were mixed for $ 91.00 to $ 114.00 / cwt. There were some packages of Holstein ox that were selling in the lower $ 120.00 / cwt. Unfinished or heavy dairy bulls fed with silage fetched $ 70.00 to $ 91.00 / mid. Dairy x beef steers mostly cost $ 90.00 to $ 119.00 / cwt. Cows were significantly lower, bringing in $ 39.00 to $ 59.00 / cwt. However, flawless cows in more meaty condition still sold at the top $ 70.00s / cwt. Doubtful health and lean cows brought in $ 39.00 / cwt and less. Dairy breed bull calves ranged consistently at $ 40.00 to $ 90.00 / cwt with heavier, well cared for calves up to $ 165.00 / cwt. Beef and beef cross calves brought in up to $ 310.00 / cwt. Market lambs were sold for 250.00 USD / mid. sold.