Rather strong near-term (delivery in 1 to 9 days) and longer-term (delivery in 17 to 30 days) prices were posted at the mid-week Fed Cattle Exchange (the market summary for this electronic platform is available here). The wholesale beef market (boxed beef cutout value by AMS) continued to dramatically drop, but remained above a year ago.

Barrow and gilt prices (e.g. National Base Carcass price) were about unchanged for the week and as in recent weeks were well above 2016’s. The pork cutout value was up slightly week-over-week and 16 per cent above a year ago.

Turning to the livestock futures markets, for the week (average of the daily closing prices) the nearby (July) Lean Hog contract was up $0.28 per cwt. to $92.31. Prices on deferred hog contracts for the next 12 months all slipped (e.g. December 2017 declined by $1.63 per cwt. week-over-week).

On a weekly basis, the Live Cattle contracts were all higher — August 2017 was up $1.60 per cwt. (averaged $116.36 per cwt.) and December increased $2.46 for the week. Feeder Cattle contracts also posted price increases.

We take note of three market data items or reports that were released last week. First, early in the week Iowa State University (Dr Lee Schulz) released estimated hog producer returns for the month of June (the webpage is here).

The upswing in hog prices during June bolstered producer profitability. On a farrow-to-finish basis, profitability in Iowa was estimated at nearly $41.50 per market hog sold. That was the highest for any sale month since October 2014.

Recent profitability levels, as well as opportunities to lock-in prices using the futures market at or above breakeven levels, suggest no pull-back in producer production plans.

USDA’s World Agricultural Outlook Board released their monthly market update and forecast report (WASDE) last Wednesday (full report is here). The corn and soybean forecasts, along with some rain in parts of the Cornbelt, dropped both cash and futures feedstuff prices after the report. The WASDE report had rather minor changes in domestic livestock and poultry production.

We highlight USDA’s international trade comments. "The beef export forecast [2017] is raised as global demand is expected to strengthen during the second half of the year. For 2018, both beef import and export forecasts are raised. Pork, poultry, and egg forecasts for 2017 and 2018 are unchanged from the previous month."

Finally, Friday brought monthly Consumer Price Index (CPI) data and the associated USDA Economic Research Service (ERS) calculations of national retail prices (the ERS page is here). In June, the overall CPI for meats (see above graphic) increased to its highest level since September 2016.

In the ERS calculated retail prices, pork was rather unchanged at up 2.8 cents per pound (0.8 per cent) month-over month and down 1.4 cents (-0.4 per cent) year-over-year. For the two beef price calculations by ERS, Choice beef in June was up from May’s by 6.7 cents per pound (1.1 per cent) and All Fresh beef increased 19.6 cents (3.5 per cent).

Year-over-year, both Choice and All Fresh beef prices were nearly unchanged. Readers should note that each month ERS usually adjusts their All Fresh calculation for prior months, sometimes significantly.