WLI

Negotiated cash fed cattle trade and demand were light to moderate in the Southern Plains through Tuesday afternoon with live prices $2 lower at $138/cwt.

In Nebraska, there were a few dressed sales at $226-$227 on slow trade and light demand, but too few to trend. Last week live prices were $144 and dressed prices were $230.

Elsewhere, trade was mostly inactive on light demand, according to the Agricultural Marketing Service. Live prices in the western Corn Belt Monday were $2-$3 lower at $142. Dressed prices last week were $227-$230. Live prices in Colorado last week were $140-$144.

Softer cash prices pressured Feeder Cattle an average of 75¢ lower despite the tiny respite in Corn futures.

Grain and Soybean futures closed mostly higher, though with KC Wheat up another 15¢ to 20¢. 

Corn futures closed mixed, mainly 4¢ lower to 2¢ higher, starting with new-crop contracts.

Soybean futures closed mostly 17¢ to 20¢ higher. 

Recently higher wholesale beef prices helped cap losses in Live Cattle futures, which closed an average of 44¢ lower, except for 27¢ higher in away Aug.

Choice Boxed beef cutout value was 17¢ higher Tuesday afternoon at $260.48/cwt. Select was $2.52 higher at $248.19.

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Major U.S. financial indices closed higher Tuesday, with investors apparently supported by supposed bottom picking and emboldened by retail data. U.S. retail sales grew by 0.9% in April, according to the monthly Advance Sales report from the U.S. Census Bureau.

The Dow Jones Industrial Average closed 431 points higher. The S&P 500 closed 80 points higher. The NASDAQ was up 321 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.80 to $2.19 lower through the front six contracts.

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Despite bearing the brunt of pandemic dining room lockdowns and restrictions, independent restaurants with one to two locations still represent 53% of total restaurants in the U.S., according to The NPD Group (NPD). Based on NPD’s Fall 2021 ReCount® restaurant census, independent restaurant locations declined by 8% or 28,399 units in 2020 but grew by 1% or 2,893 units by late 2021. Independent locations are growing in seven of the nine Census divisions and large urban areas like Los Angeles, Dallas-Fort Worth, and Seattle-Tacoma.

Independent restaurant spending with broadline foodservice distributors also points toward recovery.

Independent operators increased cases of food and supplies ordered from leading broadline distributors by 27% in the 12 months ending March 2022 compared to the same period a year ago. That was 5% more than the pre-pandemic level in the period ending March 2019. 

“The pandemic lockdowns and restrictions were particularly tough for Independent restaurant operators since they have fewer resources and capital than chains to withstand tougher times,” says David Portalatin, NPD food industry advisor. “Some independents didn’t make it, but many did, and they are thriving and contributing to the overall vibrancy of the U.S. foodservice market.” 

Consumer online and physical visits to independent restaurants increased by 12% in the 12 months ending March compared to the same period a year ago and are now 7% below the pre-pandemic level in the 12 months ending March 2019, according to NPD.

During the same period, visits to independent full-service restaurants — representing about 63% of all independent restaurants — were up 19% compared to the year ending March 2021, resulting in a 14% decline from the year ending March 2019 before the pandemic.

Quick-service independent restaurant traffic increased by 5% in the 12 months ending March 2022 compared to a year ago and was up 1% from the pre-pandemic level in the 12 months ending March 2019.

India’s weekend announcement that it would ban wheat exports shoved nearby KC Wheat limit up 70¢ Monday, leading other grains higher.

Corn futures closed 16¢ to 28¢ higher through new-crop contracts and then mostly 7¢ to 9¢ higher.

Soybean futures closed 10¢ to 13¢ higher through Aug ‘23 and then mostly 1¢ to 4¢ higher.

Surging feed costs pressured Feeder Cattle futures an average of 66¢ lower.

Live Cattle futures closed an average of 69¢ higher, buoyed by oversold conditions, the cash premium and recently higher wholesale beef prices.

Choice Boxed beef cutout value was $1.36 higher Monday afternoon at $260.31/cwt. Select was $1.77 higher at $245.67.

Negotiated cash fed cattle trade was slow on light demand in the western Corn Belt through Monday afternoon with prices steady to $3 lower than last week at $142/cwt. Dressed prices there last week were $227-$230.

Elsewhere, trade was at a standstill, according to the Agricultural Marketing Service. Last week, live prices were $140 in the Southern Plains, $140-$144 in Colorado and $144 in Nebraska where dressed prices were $227-$230.

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Major U.S. financial indices closed flat to lower Monday.

The Dow Jones Industrial Average closed 26 points higher. The S&P 500 closed 15 points lower. The NASDAQ was down 142 points.

West Texas Intermediate Crude Oil futures on the CME closed $1.33 to $3.71 higher.

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“The bleak prospects for pasture and hay production, combined with continued diminishment of hay stocks, suggests that significant and severe impacts on cattle herds are ahead as summer approaches,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments.

Pointing to USDA’s recent Crop production report, Peel explains hay stocks May 1 were 6.9% less year over year and 15.1% less than the average for 2012-2021. He adds hay stocks were 17.7% less than a year earlier in the 17 Plains and Western states.

“In all of these 17 western states, drought continues widespread,” Peel says. “More than 50% of the U.S. beef cow herd is directly threatened by drought. Across the country more than 50% of pastures and range are in poor to very poor condition. That majority of this pasture and range is in these western states.”

Regionally, Peel says hay stocks in the West are 36.6% less than 2020 levels, following two years of drought and are 27.1% less than the 10-year average.

In the Southern Plains region of Kansas, Oklahoma and Texas, he explains May 1 hay stocks were down 12.0% year over year and down 25.3% from the 2012-2021 average.

“Colorado and Nebraska are unique among the 17 western states,” Peel says. “Colorado had hay stocks up 152.2% year over year and up 30.3% over the 10-year average. Nebraska had May 1 hay stocks up 25.0% year over year and 14.1% above the 2012-2021 average. Despite the improvement in hay stocks for these two states, drought conditions persist and pasture and range conditions are diminished in 2022.”

According to the latest USDA Crop Progress report, as of May 15, 22% of the nation’s pasture and range was classified as Good (20%) or Excellent (2%) compared to 25% last year, and 49% was rated Poor (24%) or Very Poor (25%) versus 43% the same week a year earlier.

Grain futures were mixed Friday, continuing to adjust to the previous day’s bullish World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 4¢ to 10¢ lower. Soybean futures closed 12¢ to 32¢ higher through Sep ‘23 and then fractionally higher to 1¢ higher, except for 63¢ higher in spot May. 

Softer Corn prices helped Feeder Cattle futures regain a little lost ground Friday, closing an average of 84¢ higher (20¢ to $1.50 higher), except for 40¢ lower in the back contract.

Live Cattle futures closed an average of 39¢ lower, except for 42¢ higher in spot Jun, challenged by sluggish wholesale beef prices.

However, Choice Boxed beef cutout value was $1.75 higher Friday afternoon at $258.95/cwt. Select was 46¢ lower at $243.90. Week to week, Choice boxed beef cutout value was $4.51 higher but Select was $1.16 lower.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive with very light demand through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were $140/cwt. in the Southern Plains, $144 in Nebraska and $144-$145 in the western Corn Belt. Dressed prices were $227-$230.

Estimated total cattle slaughter last week was the same as the prior week at 657,000 head. Year-to-date estimated total cattle slaughter of 12.3 million head was 71,000 head more than the previous year. Total estimated year-to-date beef production of 10.28 billion lbs. was 91.1 million lbs. more than the same time last year.

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At least for the day, investors on Wall Street seemed to think it was time to expand ownership in stocks, pushing major U.S. financial indices sharply higher.

The Dow Jones Industrial Average closed 466 points higher. The S&P 500 closed 93 points higher. The NASDAQ was up 434 points.

West Texas Intermediate Crude Oil futures on the CME closed $2.85 to $4.36 higher through the front six contracts, apparently buoyed by snug supplies and chatter about Shanghai reopening.

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Although western pasture and range conditions showed year-over-year improvement the first two week of this year’s growing season, nationwide conditions declined, say analysts with the Livestock Marketing Information Center (LMIC), in the latest Livestock Monitor.

“More than 50% of U.S. pasture and range is rated Poor to Very Poor compared to just under 50% last year. Western pastures are rated under 40% Poor and Very poor compared to more than 50% a year ago,” say LMIC analysts. “Great Plains and Southern Plains states are showing more severe conditions at this time. Great Plains pasture and range conditions are currently rated 60-55% Poor and Very Poor in the first two weeks of the (rating) year, needing additional feed to support normal stocking densities. The five-year average indicates that the start of year typically only shows about a 10% rating of Poor and Very Poor.”

LMIC analysts note the starkest deterioration is in the Southern Plains, where 57% and 50% of pasture and ranges was classified as Poor or Very Poor the first two weeks, compared to about 30% at the same time last year and about 15% for the five-year average.

Grain futures marched higher Thursday, buoyed by the latest monthly World Agricultural Supply and Demand Estimates (see below), led by Kansas City Wheat, which closed 63¢ to 69¢ higher in the front five contracts.

Corn futures closed mostly 8¢ to 16¢ higher, while Soybean futures closed 3¢ to 10¢ higher through Aug ‘23 and then mostly unchanged to 4¢ lower.  

Cattle futures stepped lower beneath the weight of the outlook for continued higher feed prices.

Feeder Cattle futures closed an average of $2.88 lower ($1.27 to $3.50 lower). Live Cattle futures closed an average of $1.30 lower (50¢ lower at the back to $2.07 lower toward the front).

Negotiated cash fed cattle trade ranged from limited on light demand to a standstill through Thursday afternoon with too few transactions to trend, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt., $2 lower in Nebraska at $144 and steady to $2 lower in the western Corn Belt at $144-$145. Dressed prices are $2 lower in Nebraska at $232 and $2-$3 lower in the western Corn Belt at $227-$230. Live prices in Colorado last week were at $142-$148.

Choice Boxed beef cutout value was $2.12 higher Thursday afternoon at $257.20/cwt. Select was $2.18 higher at $244.36.

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Major U.S. financial indices continued to waver Thursday, with inflation worries and concerns about economic growth.

The Dow Jones Industrial Average closed 103 points lower. The S&P 500 closed 5 points lower. The NASDAQ was up 6 points.

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USDA’s Economic Research Service (ERS) increased both forecast beef production and fed steer prices slightly for this year, in the latest monthly World Agricultural Supply and Demand Estimates.

ERS increased the annual average five-area direct fed steer priced for this year by 60¢ to $140.10/cwt. That was based on current prices and expectations of tighter supplies in the second half of this year. Average prices are projected at $140 in the second quarter, $136 in the third quarter and $145 in the fourth quarter.

The average annual price next year is forecast to be $153, lifted by tighter supplies.

ERS increased expected beef production slightly for this year, compared to the previous month, to 27.84 billion lbs. That would be 106 million lbs. less than last year (-0.4%).

“Beef production is raised, with more cattle placed in feedlots sooner than normally expected due to drought conditions, supporting higher annual fed cattle slaughter,” say ERS analysts. “Additionally, cow slaughter is forecast higher.”

Beef production next year is forecast at 25.95 billion lbs., which would be 1.89 billion lbs. less (-6.8%) compared to this year.

Total red meat and poultry production this year is projected to be 106.38 billion lbs., slightly more than the previous month’s estimate. The total would be 431 million lbs. less than last year (-0.4%). Total red meat and poultry production next year is forecast to be 105.34 billion lbs., which would be 1.04 billion lbs. less than this year (-0.97%) less than this year.

Turning to crops, ERS analysts emphasize, “Russia’s recent military invasion of Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The May WASDE represents an ongoing assessment of the short-term impacts as a result of this action.”

Corn

The 2022-23 U.S. corn outlook is for lower production, domestic use, exports, ending stocks, and higher prices.

The season-average corn price received by producers is projected at $6.75/bu., up 85¢ from a year ago. If realized, it would be the highest average price since $6.89 in 2012-13.

Soybeans

The 2022-23 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks compared with 2021-22.

The 2022-23 U.S. season-average soybean price is forecast at $14.40/bu., compared with $13.25 in 2021-22. Soybean meal prices are forecast down $20 per short ton from 2021-22 to $400/short ton and soybean oil prices are forecast down 5¢ to average 70¢/lb., as oilseed and product supplies rebound in foreign markets.

Wheat

The outlook for 2022-23 U.S. wheat is for reduced supplies, exports, domestic use stocks, and higher prices.

The projected 2022-23 season-average farm price is a record high $10.75/bu., up $3.05 from last year’s revised price.

Cattle futures were mixed Wednesday, with Feeder Cattle pressured by a surge in Corn futures

prices, while Live Cattle was supported by the discount to cash.

Feeder Cattle futures closed an average of $1.19 lower (35¢ lower at the back to $1.85 lower toward the front).

Live Cattle futures closed an average of 47¢ higher (10¢ to $1.17 higher), except for an average of 6¢ lower in three contracts.

Negotiated cash fed cattle trade was slow on moderate demand in the Texas Panhandle, Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service.

So far this week, live prices are steady in the Southern Plains at $140/cwt. and $2 lower in Nebraska at $144. Dressed prices in Nebraska are $2 lower at $230.

Live prices last week were $142-$148 in Colorado and $144-$147 in the western Corn Belt, where dressed prices were $230-$232.

Choice Boxed beef cutout value was 16¢ lower Wednesday afternoon at $255.08/cwt. Select was 17¢ lower at $242.18.

Corn and Soybean futures rose on South American wonderments and likely positioning ahead of Thursday’s World Agricultural Supply and Demand Estimates.

Corn futures closed mostly 15¢ to 17¢ higher through Jly ‘23 and then mostly 4¢ to 5¢ higher.

Soybean futures closed 11¢ to 20¢ higher through Aug ‘23 and then mostly 2¢ higher.  

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Major U.S. financial indices closed sharply lower Wednesday, pressured by higher inflation than investors expected.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in April on a seasonally adjusted basis after rising 1.2% in March, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment.

The Dow Jones Industrial Average closed 362 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 373 points.

West Texas Intermediate Crude Oil futures on the CME closed $4.62 to $5.95 higher through the front six contracts, apparently fueled by a day of increased fears about shortages.

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Choosing to consume beef or plant-based proteins designed to mimic the real thing is not an either/or proposition, according to a new study from agricultural economists¹ at Kansas State University and Purdue University.

The analysis — Benchmarking U.S. consumption and perceptions of beef and plant-based proteins — comprised two separate studies. One documents factors affecting beef and plant-based consumption. The other focuses on factors motivating consumers to include beef and/or plant-based proteins in their diets.

“An interesting insight comes from evaluating beef and plant-based consumption together. Of the 6% of respondents who ate plant-based proteins, 58% also ate beef during the prior day. In other words, 4% of respondents ate both beef and plant-based proteins in the same day,” according to the study. “This indicates beef and plant-based protein consumption are not necessarily exclusive of each other. More participants ate both proteins than ate plant-based protein only and not beef.”

Around 6% of all respondents consumed plant-based proteins (patties and crumbs specifically) at least once during the previous day, while 53% ate beef at least once.

The fact that some consumers already consume beef and plant-based proteins in the same day could motivate development of blended products, according to the researchers.

“Blending may be an attractive consideration for the beef industry if these proteins (plant) become much cheaper to produce and consumers perceive them as close alternatives to animal-derived meat. Blending products could decrease the price of these hybrid products, increasing the quantity demanded of both traditional beef and plant-based proteins,” according to the study. “In this way, plant-based proteins could compete with imports of lean beef destined for blending into ground products and thus fulfill a market segment for U.S.-produced products.”

Keep in mind, alternative protein market share is exceptionally small, relative to beef, as demonstrated in a number of studies.

“Current consumer preferences do not support projected major demand changes, especially since whole muscle products such as steaks and roasts are currently only available from animal sources,” say researchers.

¹Researchers included agricultural economists: Glynn Tonsor and Ted Schroeder, Kansas State University (K-State); Jayson Lusk, Purdue University; Hannah Taylor, USDA-ERS, who was with K-State when the study was conducted.