Markets
With no post-holiday wavering, all cattle and beef markets moved higher in the first half of January – setting new record price levels to start the new year.
Cash cattle averaged $204.12 per cwt., up from last week, while lean carcass hog prices came in at $81.79 per cwt.
Cash cattle averaged $202.96 per cwt., up from last week, while lean carcass hog prices were slightly down at $81.08 per cwt.
Now in mid-January, the cattle markets are showing exceptional optimism. Packers were actively bidding to capture spot market needs.
November was an exciting month for U.S. red meat, with year-over-year gains across all categories.
Cash cattle averaged $199.48 per cwt. while lean carcass hog prices were at $81.79 per cwt., both up from last week.
Brad Kooima of Kooima Kooima Varilek in Sioux Center, Iowa, says cash fed cattle trade hit record highs last week and could be steady to even a bit higher again this week. Historically tight supplies continue to support the rally.
Brad Kooima of Kooima Kooima Varilek says cattle futures recovered nicely from Friday’s selloff with some contracts making new highs for the move, pricing in record cash cattle trade. Grain markets are seeing fund buying with soybeans and meal leading on dry weather forecasts for Argentina.
Cash cattle averaged $195.68 per cwt. while lean carcass hog prices were at $81.02 per cwt., both up slightly from last week.
Looking back, 2024 was mostly a continuation of the story that has been developing since 2022.
Cash cattle averaged $194.99 per cwt. while lean carcass hog prices were at $80.35 per cwt.
Last week’s federally inspected cattle harvest was 5,000 head smaller than the prior week and 38,000 head smaller than the same week a year ago. A large contribution gap between classes of cattle in the harvested total remains in place.
The packer/feeder margin spread grew this week in favor of the feeder at $285 per head while pork producers found positive margins of $39.77.
Calf and feeder cattle prices have been much more active in the past three weeks with two market-moving events, including precipitation in the central states and the temporary closure of the southern border due to screwworms.
Packer margin losses grow, with beef packers at a loss of -$91.33 per head and pork packers averaging losses of -$5.87 per head.
Packer margins remain in the red for beef at -$60.29 and stayed similar for pork.
The latest Cattle on Feed report showed feedlot inventories on Nov. 1 were 11.99 million head, equal to one year ago. Heifer retention still affecting herd rebuilding.
Margins widened this week this week for pork and beef producers while packer margins remain in the red for beef at -$34.67 and decreased for pork to $8.65.
Last week’s harvest averaged 100,000 with except of Veteran’s Day holiday. Feeder cattle demand elevated after widespread precipitation throughout much of the winter wheat grazing region.
“The agricultural economy is inherently cyclical, and ag lenders are navigating the changing conditions across the sectors they serve,” said Jackson Takach, chief economist of Farmer Mac.
The estimated total cost for finishing a steer last week was $2,770 per head. Hogs placed for finishing last week had a breakeven at $68.36 per head.
Cattle harvest was down last week, but carcass weights remain record breaking. Q4 tends to be the period most prone to follow historical seasonal patterns for carcass cutout prices.
While feedlot margins are declining in the beef industry, hog margins are increasing for U.S. pork producers. Here’s a look at the latest Profit Tracker from Sterling Marketing.
Hogs placed for finishing last week had a breakeven at $69.49 per head. The estimated total cost for finishing a steer last week was $2,702 per head, according to the Sterling Profit Trackers.
Heifers made up 39.7 percent of the total feedlot inventory on Oct. 1, up slightly from the 39.6 percent in July.
Market update for week of Oct. 23 and a look at how carcass weigh and ribeye sizes correlates..
How did the beef and pork markets shake out last week?
Total beef production is down a scant 0.7 percent so far this year and may end the year equal to year ago levels. Despite this, wholesale and retail beef prices are higher thus far in 2024.
Beef packers saw profits increase $26 per head to a total loss of $86 per head. That puts the packer/feeder margin spread at $289 per head in favor of the feeder. Meanwhile, pork packers saw average profits of $25 per head, up $2.68 from the previous week.
U.S. Meat Export Federation announces new records for volume and value for pork exports will be achieved in 2024. While not as strong, beef exports are holding their own, led by Mexico purchases.