Negotiated cash fed cattle trade was at $104-$105/cwt., which was $1-$3 less than the previous week. Dressed trade was $2-$5 less at mainly $165-$166.
Cattle futures edged mostly higher by the end of light trade on Friday, likely mostly due to light trade and position squaring ahead of the long weekend. Traders will return from Labor Day looking for indications of how aggressive consumers were in purchasing beef for the last unofficial holiday of summer.
Except for 25¢ lower in new spot Oct, Live Cattle futures closed an average of 52¢ higher (30¢ to 77¢ higher).
Feeder Cattle futures closed an average of 45¢ higher (12¢ to 85¢ higher).
Choice boxed beef cutout value was 56¢ lower Friday afternoon at $191.35/cwt. Select was 69¢ lower at $190.65.
******************************
Despite a fractional increase in the nation’s unemployment rate to 4.4% and fewer new jobs added last month than expected (156,000), according to Friday’s monthly Employment Situation report from the Bureau of Labor Statistics, major U.S. financial indices closed higher on Friday.
The Dow Jones Industrial Average closed 39 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 6 points higher.
*****************************
Wholesale beef prices last week showed signs of steadying for the first time since the middle of June, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments.
“The Choice cutout price has declined about $58/cwt. in an 11-week period, while the Select cutout price has lost nearly $29 over the same time period,” Griffith says. “During the wholesale beef price decline, the Choice-Select spread essentially moved from historically wide spread (above $30/cwt.) to no spread at all (less than $1). The Choice-Select spread typically narrows this time of year due to demand factors, but the supply side has provided a strong case for a narrowing spread.”
Griffith explains an average of about 64% of federally inspected fed steers and heifers graded Choice or higher in August for the past five years. More than 70% graded Choice or higher so far this year—nearly 74% in recent weeks. In other words, more Choice and higher-grading carcasses in tandem with fewer lower-grading carcasses are also helping to narrow the spread.
For broader perspective, although domestic per-capita beef consumption this year will be the largest since 2012 on a retail weight basis, and domestic per-capita consumption of total red meat and poultry will be the most since 2008, analysts with the Livestock Marketing Information Center (LMIC) point out that neither are projected to be record-large, even though total red meat and poultry production this year is projected to be record-high.
That’s why context is important, they explain in a recent Livestock Monitor.
Production is calculated on a carcass weight basis and LMIC projects U.S. production of red meats this year to be record-high at approximately 52.1 billion lbs. Of the red meats, only pork production is projected record-high at about 25.7 billion lbs. Projected beef production is projected at 26.2 billion lbs. U.S. poultry production this year is projected to be record-large at 47.4 billion lbs.
Rather than an anomaly, LMIC analysts point out that record-large and near record-large annual meat production is the rule rather than the exception. In fact, they say that for 71% of the years from 1960 through last year, record-large U.S. red meat and poultry production was achieved.
Now for the consumption side of the equation.
Consumption, or disappearance, accounts for population growth, subtracts meat exports, adds meat imports and adjusts for year-over-year changes in frozen stocks.
With that in mind, domestic per-capita red meat and poultry consumption is not projected to be record large this year.
“Drilling down into the production numbers shows large supplies of most meats and poultry, but not unheard of levels,” LMIC analysts emphasize. They add that looking at retail weight per person is important because it offers insight, including how exports impact domestic use.