If fat cattle auctions are any indication, negotiated cash fed cattle prices are shaping up to be lower this week.
For instance, fed steers and heifers traded $2-$3 lower at Sioux Falls Regional in South Dakota where Ch 2-4 steers brought $105.60-$107.25/cwt.
Likewise, Choice steers were $2.00-$2.25 lower at Tama, IA, bringing $107.25-$108.36
There were 751 head offered in the weekly Fed Cattle Exchange auction Wednesday, but no takers.
Cattle futures were lightly traded again Wednesday, closing mostly narrowly mixed, with no apparent impact from the USDA announcement about a confirmed case of atypical BSE. It was found in a 6-year-old mixed-breed beef cow in Florida. The animal never entered slaughter channels and never presented a risk to the food supply, or to human health in the United States. Atypical BSE generally occurs in older cattle, usually 8 years of age or older. It seems to arise rarely and spontaneously in all cattle populations.
Except for $1.37 higher in nearly spent spot Aug, Live Cattle futures closed an average of 19¢ higher across the front half of the board and then an average of 26¢ lower.
Feeder Cattle futures closed an average of 17¢ lower across the front half of the board, and then an average of 84¢ lower.
Wholesale beef values were firm on Choice and weak on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 28¢ higher Wednesday afternoon at $212.68/cwt. Select was 73¢ lower at $203.55.
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Major U.S. financial indices closed higher again Wednesday, led by rallying tech stocks, including Amazon and Apple. Reports that Canada is rejoining the NAFTA talks also provided support.
The Dow Jones Industrial Average closed 60 points higher. The S&P 500 closed 16 points higher. The NASDAQ was up 79 points.
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One downside to the nation’s strong economy and purportedly higher average wages is that it’s making it tougher to hire agricultural workers, which was already a vexing challenge.
According to a new study from CoBank’s Knowledge Exchange Division, manual laborers are chasing higher wages offered in industries like transportation, construction, hospitality and mining, forcing agriculture employers to increase wages at a faster rate to compete.
“Wages have historically been higher in these other industries compared to most farm labor,” says Ben Laine, a senior economist with CoBank. “The difference now is that these jobs are much more widely available and are more in line with the background of workers coming from Mexico.”
The shrinking number of migrant workers from Mexico also exacerbates the scarcity of farm labor. In addition to immigration controls like tightening borders and increased immigration enforcement, birthrates in Mexico are falling and populations are moving toward urban areas, leaving fewer people with agricultural backgrounds who would be interested in U.S. farm work.
The CoBank study, Help Wanted, is broken into two sections: Wage Inflation and Worker Scarcity; U.S. Agribusiness Experience Hiring Headaches.
“Labor accounts for a significant share of overall operational costs for many types of farms, particularly specialty crops and dairies,” Laine says. “In 2016, labor costs on all farms made up about 10% of gross income while in the specialty crop sector, that share was closer to 27%.”