US hogs hit new lows - CME

Apr 17, 2023

Chicago Mercantile Exchange (CME) live cattle futures firmed on Wednesday on expectations for higher US cash prices this week, as lean hog futures set contract lows, Reuters reported, citing analysts.

Cash cattle were bid at about $168 per cwt in the southern Plains, roughly $1 higher than the bulk of trading last week, said Dennis Smith, commodity broker for Archer Financial Services. Meatpackers will need to pay more to strike deals, he said.

"If they want the cattle, they're going to have to bid higher than $168," Smith said, adding that prices may rise to $170 per cwt.

Meat processors slaughtered an estimated 123,000 cattle on Wednesday, down from 127,000 cattle a week ago and 124,000 cattle last year, the US Department of Agriculture (USDA) said.

The agency reported boxed beef prices rose, while HedgersEdge.com said processors' margins climbed to $80.15 per head of cattle from $59.15 per head on Tuesday and $52.45 per head a week ago.

April live cattle finished 0.800 cent stronger at 168.400 cents per pound, and June live cattle ended up 0.075 cent at 160.300 cents per pound.

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Video: Selling Hay for 40 Years: Fritz Trauttmansdorff, Dunlea Farms

Fritz Trauttmansdorff came to Canada from Austria in 1980, bought a 45-cow dairy farm at Jerseyville, and within two years had more hay than he knew what to do with. He sold the quota in 1986, went debt-free, and built a hay business that has kept some of the same customers for forty years. Today Dunlea Farms runs about 2,500 acres — roughly 600 of it hay, the rest IP soybeans and grain corn — and Fritz makes the case that hay isn't the crop you grow when grain doesn't work. It's the crop that makes the grain work.

"If you grow corn, soybeans and wheat, you're on a three-wheeler. If you put hay in the rotation, you're on a four-wheeler."

WHAT WE COVER • Why the hay market moves independently of the Chicago Board — and what that does for farm-level risk
• The real cost of a mistake: five bushels in grain, versus the whole crop in hay
• Getting a second job out of the same iron — planting tractors that mow all summer, tillage tractors that bale
• How a grain farmer can get hay into the rotation without buying a single piece of hay equipment
• Drilling Timothy in the fall and double-cropping soybeans into it the next June
• What it actually takes to go all-in: roughly 500 acres, good sheds, and a baler you didn't buy used
• Local, regional and international hay markets — and choosing which one you're building for
• Why 40-year customer relationships are the asset, not the equipment