ARCTIC cold temperatures and snow events across the northern and midsection of the country delayed the movement of livestock to slaughter plants earlier in the week.
Last Tuesday, two pork processing plants reported being closed or reduced slaughter hours due the winter storms.
Hogs held over will continue to gain weight in climate-controlled buildings.
Snow and cold weather are challenging for feedlots. The rate of gain for cattle will slow as animals use more energy to maintain body temperatures.
Extreme winter weather and tighter supplies have been driving cattle prices steadily higher over the past two weeks. Both cash cattle and futures markets continue to set records.
Fed cattle futures continued their rally, with six consecutive sessions of record highs for any front-month contract. Last Thursday's session hit a high of $169/cwt. An expectation that the U.S. Department of Agriculture's Jan. 10 "Crop Production" report would show large corn and soybean crops at lower prices encouraged the rally in feeder cattle futures.
Live cattle started the week at a high of $136.825/cwt. last Monday and ended slightly lower at $136.550/cwt. on Thursday's close.
All week, USDA reported that negotiated cash trade was mostly inactive in all feed regions. The latest established market was in the previous week, when cattle traded as high as $137/cwt. in Kansas and $139/cwt. in Nebraska.
USDA estimated last Thursday's cattle slaughter at 117,000 head for a total of 449,000 head slaughtered for the week, down from 503,000 head a year ago.
Wholesale beef cutout values steadily climbed last week, ending on a high of $212.05 for Choice and $209.05 for Select.
Market rumors hinted that packers have orders on the books and so, in an effort to fill them, bid up cattle.
Farm Progress analyst John Otte cautioned that, at some point, price gains will outpace retailers' and consumers' willingness to buy.
In the dairy market, the milk:feed margin was the highest it has been for five years (Figure), and milk prices remain strong, according to Katie Krupa at Rice Dairy.
Cash butter prices climbed daily to reach $1.6148/lb. last Thursday. Block and barrel cheeses also increased 15 cents and 21 cents to $2.20/lb. and $2.16/lb., respectively.
Reviewing the USDA November dairy products report, total cheese output was 941 million lb., 2.9% above last year. Butter production was 0.1% below November 2012 at 143 million lb. Nonfat dry milk powder was down 13.6% from the year before to 100 million lb., and skim milk powder was up 26.1% to 56.4 million lb.
Hog futures were slightly lower all week and ended at $85.25/cwt., down $1.425 from a week ago. Traders are anticipating a tight hog supply in the spring and summer as a result of porcine epidemic diarrhea virus losses.
On the other hand, cash hogs were mixed last week, ending stronger in the East and weaker in the West. At week's end, cash hogs were $77.46/cwt. in the eastern Corn Belt and $77.55/cwt. in the western Corn Belt.
USDA estimated last Thursday's hog slaughter at 429,000 head for a total of 1.533 million for the week, down from 1.710 million a year ago. Analysts all agree that the vital question is what hog runs will be next week under normal weather conditions.
Lower pork cutout prices positioned pork to gain a retail consumer edge over beef, according to Otte. Pork cutout values were sluggish all week, which could spark consumers to spend their food dollars on pork versus beef.
The chicken markets were steady to mostly firm last week. Retail and foodservice demand was light as buyers tried to keep inventories at manageable levels due to the snowstorm events.
Breast meat prices dropped 13 cents to $1.79/lb. last Wednesday, while full wings remained unchanged at $1.24/lb.
Compared to a year ago, the number of eggs set was up 2%, with 199 million set for the week ending Jan. 4. Broiler-type chick placements were up 1% from the corresponding week last year to 165 million.
Egg prices were lower last Monday and remained unchanged at $1.12-1.16 and $1.03-1.06/doz. for large-size eggs delivered to eastern and midwestern store doors.