Author: David Anderson

Fed cattle prices in the Southern Plains jumped a few more dollars per cwt last week to get to $154.71 per cwt.  That was almost $20 per cwt higher than the summer low.  Prices were also the highest since Spring 2015 and the highest for the first week of December since 2014.

Fed cattle prices typically increase, seasonally, from summer through the end of the year.  This year, there was not much of a summer low with prices trading between $135 and $140 most of the year.  

Several factors are contributing to rising fed cattle prices.  It appears that slaughter numbers are beginning to decline compared to earlier in the year.  Slightly fewer numbers have packers bidding more for available supplies.  It appears that beef demand continues to support the market.  

Throughout this year, fewer fed cattle graded Prime than during the corresponding week of the prior year.  That has led to rising premiums for Prime beef.  The national weekly direct slaughter cattle premium for Prime has averaged $23.59 per cwt this year compared to $18.19 in 2021.  The premium was $30.03 per cwt last week marking 11 straight weeks over $30 per cwt.  It surpassed $30 per cwt in only 6 weeks of November and December 2021.  Prior to 2021 the average weekly premium had never surpassed $30 per cwt.

Higher fed cattle prices are pulling calf and feeder prices along for the ride.  Feed costs drifting lower are helping boost calf and feeder prices.  Georgia 5-600 pound steers have climbed from $160 to $170 per cwt over the last few weeks.  Southern Plains 5-600 pound steers have reached $190 over the same period.  Prices for these calves typically climb through the new year and into March.  

Author: David Anderson

Professor and Extension Economist Livestock and Food Products Marketing, Dairy, Policy

danderson@tamu.edu

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Anderson, David . “Fed Cattle Prices Jump Higher.” Southern Ag Today 2(50.2). December 6, 2022. Permalink

We have been negligent here at Southern Ag Today in not adequately covering the hog and pork market, but today we are going to make up a little for that oversight.  Southern states had about 19 percent of the U.S. breeding hog inventory on December 1, 2021.  USDA’s next annual inventory report will be released on December 23, 2022.  While more hogs are produced in the Corn Belt, the South is known for pork, whether whole hog bbq, ribs, or country hams from iconic producers.  

For the year, pork production is about 2.2 percent below last year.  Production is on pace for about 27.2 billion pounds which would be the least since 2018.  The September USDA quarterly national inventory report indicated about 0.7 percent fewer breeding hogs and farrowings which likely means a smaller pig crop and fewer market hogs in 2023.  

While hog prices in 2022 have been higher than in 2021 for most of the year, they have not translated to enough profitability to generate expansion.  Several factors have combined to limit production.  High feed costs have cut into returns, as they have in the rest of livestock production.  Animal disease and difficulties with sow mortality have cut production and increased costs.  Higher facility production costs have reduced expected investment profits.  Higher anticipated future costs and uncertainty due to Proposition 12 has also been cited as a reason for restrained production. 

On the pork side, wholesale ham prices have been significantly higher than last year since June.  Strong ham exports, high turkey prices with hams as a potential substitute, and fewer hams in cold storage have pushed prices higher.  Belly prices, while exhibiting their typical volatility, have been lower than last year since April.  In October, 40.2 million pounds of bellies were in cold storage compared to only 11.6 million pounds the year before.  

Tight supplies and likely high prices will be the ongoing story in the hog and pork market for most of 2023.  Any increase in production will be delayed until late in the year, at best.

Author: David Anderson

Professor and Extension Economist Livestock and Food Products Marketing, Dairy, Policy

danderson@tamu.edu

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Anderson, David. “High Hog And Pork Prices This Year.” Southern Ag Today 2(49.2). November 29, 2022. Permalink

Beef, pork, and chicken prices are included in the consumer price index (CPI) released monthly.  Last week’s October CPI indicated meat prices going in opposite directions.  Two average retail beef prices are reported: Choice beef and the All Fresh beef.  The Choice beef price is an average beef price of USDA Choice quality grade.  The All Fresh includes fresh beef of any USDA grade.  The average retail pork price and broiler price are reported representing various cuts.

The average retail Choice beef price was $7.42 per pound, down 6.1 percent from the record high of $7.90 per pound in October 2021.  Choice beef was also $0.18 per pound lower than in September.  The all fresh price declined to $7.25 per pound in October from $7.32 in September.  

While beef prices have declined, pork and chicken prices have increased.  The October retail pork price was the highest on record.  The average retail pork price increased to $5.04 in October, up 4.7 cents per pound from September and 23 cents higher than a year ago.  The average broiler retail price declined almost 3 cents per pound from September, however chicken is still 34 cents per pound (22.3 percent) higher than a year ago.

When thinking about demand, relative prices for competing meats are often of interest.  Beef has become less expensive relative to pork and chicken, even though beef continues to be more expensive in absolute terms. October’s pork price was the most expensive relative to beef since July 2014.  Chicken was relatively the most expensive relative to beef since December 2020.  Beef and chicken prices are likely to continue to decline as wholesale prices are well below a year ago and large supplies are available.  Pork prices will likely continue to increase due to tight supplies of pork.

Author: David Anderson

Professor and Extension Economist Livestock and Food Products Marketing, Dairy, Policy

danderson@tamu.edu

Anderson, David. “Retail Beef Prices Lower, Pork Higher.” Southern Ag Today 2(47.2). November 15, 2022. Permalink

Typically, beef cow culling peaks, nationally, during the last few weeks leading up to Thanksgiving.  The rapid pace of cow culling was documented in SAT back in early September, focusing on the South.  At that time, there was some hope that the pace of culling might slow in the Fall due to large numbers sent to market earlier.  Those hopes have failed to materialize as beef cow slaughter hit 84,800 head for the week ending October 22^nd.  That is the largest weekly beef cow slaughter since the week of November 19^th, 2011. 

Total beef cow culling is up 364,000 head in 2022 over 2021.  All of the increase comes from states in the Southern half of the U.S. and the Plains.  Slaughter in Region 6, which includes Texas and Oklahoma, is up 207,000 head over last year.  Region 7, including Kansas and Nebraska is 171,000 head above 2021.  Slaughter is up 59,000 head in the deep South and 12,000 head in the Southwest.  Beef cow slaughter is lower than last year in the rest of the country.  Increased culling continues to largely coincide with areas experiencing drought.  Costs increasing faster than calf prices have also encouraged culling.

Cow prices typically bottom out in the Fall, as slaughter peaks, and this year is no exception.  Prices have fallen below a year ago in local auctions in drought hit areas, especially for thin, lean cows.  Prices have been as much as 20 percent above a year ago, even though trending lower, in local auctions away from drought areas and for cull cows in better shape.  

Watch for beef cow slaughter in the coming weeks to see if it maintains an 85,000 head per week pace.  The more sent to market now means an even larger decline in the cowherd for next year and higher prices to come.

Author: David Anderson

Professor and Extension Economist Livestock and Food Products Marketing, Dairy, Policy

danderson@tamu.edu

Anderson, David. “Beef Cow Slaughter Ramps Up“. Southern Ag Today 2(46.2). November 8, 2022. Permalink

It’s the season to think about turkey prices as the birds will start showing up in our grocery store meat cases in the next couple of weeks.  Last year, at this time, turkey prices were record high.  Prices have set new record highs this year leading up to Thanksgiving. 

Wholesale, frozen, 8-16 pound, national average whole hen prices hit $1.80 per pound in the third week of October 2022.  They were $1.41 per pound in October 2021.  Turkey prices normally peak around the end of September to the 1^st of October.  Fresh turkeys hit $1.93 compared to $1.47 last year.

The most important factor in high prices is reduced turkey production.  High Pathogenic Avian Infuenza (HPAI) has hit the turkey industry hard.  Production this year is 4.7 percent below last year.  Turkey production has increased dramatically in recent weeks as the industry tries to boost supplies in time for Thanksgiving.  Last week’s production was 8 percent above the same week the year before.  Turkeys are typically put into cold storage for sales in the Fall.  September cold storage stocks of turkey were about 5 percent below a year ago.  The second major factor in high turkey prices are high feed costs.  High corn and soybean prices have pressured profits for turkey producers leading to lower production.  Like all other businesses, transportation costs, labor, and other costs of getting turkeys to market are higher contributing to higher turkey prices. 

While higher wholesale prices will likely translate to higher retail prices, stores often use turkeys as part of Thanksgiving marketing specials.  Grocery stores should have plenty of turkeys on hand.  But, smaller restaurants and other users have struggled getting supplies for most of this year.  

Photo by Randy Fath on Unsplash

Anderson, David . “It’s Turkey Time!“. Southern Ag Today 2(44.2). October 25, 2022. Permalink