WLI

Negotiated cash fed cattle trade was limited on light demand in all feeding regions through Thursday afternoon, according to the Agricultural Marketing Service, with too few transactions to trend.

For the week, live prices are steady in the Southern Plains at $138/cwt., but steady to $2 lower at $138-$140 in Nebraska and the western Corn Belt. Dressed trade is also steady to $2 lower at $220.

Cattle futures inched higher Thursday, although skittishness remains concerning recently slower cattle harvest amid anecdotal reports of increasing health challenges among workers.

Live Cattle futures closed an average 34¢ higher, except for an average of 12¢ lower in two contracts. 

Feeder Cattle futures closed an average 69¢ higher, except for 32¢ lower in Sep.

Choice boxed beef cutout value was $1.63 higher Thursday afternoon at $268.56/cwt. Select was $1.03 higher at $260.64/cwt.

Soybean futures closed 3¢ to 7¢ lower through Aug ‘22 and then mostly 7¢ to 14¢ higher. 

Corn futures closed 1¢ to 4¢ higher at either end of the board and fractionally mixed to 8¢ higher in the middle.

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Major U.S. financial indices eased lower Thursday, with follow-through pressure from Fed minutes the previous day indicating a faster pullback in economic stimulus.

The Dow Jones Industrial Average closed 170 points lower. The S&P 500 closed 4 points lower. The NASDAQ was down 19 points.

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Higher commodity prices, favorable financial conditions and the desire for an inflation hedge all contributed to resurgent prices for quality farmland, according to Farmers National Company (FNC).

“What started as a gradual strengthening of sales prices last fall escalated into aggressive bidding the past five months to generate new highs in prices paid for farmland in many areas,” says Randy Dickhut, FNC senior vice president of real estate operations. “Prices for good quality farmland are up 15 to 35% depending on the location.” 

Most areas of the Grain Belt experienced an increase in the amount of land sold during the last 12 months, starting with additional sale activity last fall, according to FNC.

“Non-operating landowners became more active sellers of land during 2021 with the higher prices drawing their attention as well as the potential threat of tax law changes,” Dickhut explains.

Higher prices also were driven by the increased use of competitive bidding sales methods, according to FNC. In addition to the traditional public auction approach, various online auction methods are becoming commonplace.

Negotiated cash fed cattle trade was slow to moderate on moderate demand in Nebraska and the western Corn Belt through Wednesday afternoon, according to the Agricultural Marketing Service. Dressed trade in Nebraska was $2 lower at $220/cwt. Although too few to trend, there were some early live sales at $138, compared to $140 last week.

There were some early live sales in the western Corn Belt steady at $140 and a few in the beef steady to $2 lower at $220, but too few of either to trend.

Trade in the Southern Plains was limited on light demand. A light test sold steady on a live basis at $138.

Cattle futures closed mixed Wednesday, supported by moderating grain futures price gains but pressured by the weaker cash outlook. 

Live Cattle futures closed an average of 41¢ lower, except for an average of 32¢ higher in two contracts.

Feeder Cattle futures closed an average 32¢ higher, except for unchanged to an average of 36¢ lower in the front three contracts.

Choice boxed beef cutout value was 11¢ higher Wednesday afternoon at $266.93/cwt. Select was 38¢ higher at $259.61/cwt.

Soybean futures closed 4¢ to 6¢ higher through Aug ‘23 and then 2¢ to 3¢ higher.

Corn futures closed 4¢ to 7¢ lower through the front four contracts and then mostly 1¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday, apparently fueled by the Fed’s most recent minutes suggesting stimulus tapering could accelerate and rate hikes could be coming sooner than anticipated. Queasiness relates to whether the Fed will begin reducing its balance sheet — taking liquidity from the market — once the bond buying program ends.

Positive news on the day included the closely-watched ADP^®National Employment^™report coming in significantly stronger than the trade expected with 807,000 private sector jobs added from November to December.

“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” says Nela Richardson, ADP chief economist. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth. December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year. While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels.”

The Dow Jones Industrial Average closed 392 points lower. The S&P 500 closed 92 points lower. The NASDAQ was down 522 points.

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Agricultural producer sentiment grew more positive last month, according to the Purdue University/CME Group Ag Economy Barometer. It climbed 9 points month to month in December to 125, only the second increase since last May.

The Index of Current Conditions and the Index of Future Expectations also increased with stronger current conditions responsible for the barometer’s rise. December’s Index of Current Conditions rose 18 points to a reading of 146, while the Index of Future Expectations rose 4 points to a reading of 114.

“Excellent crop yields this fall combined with strong crop prices provided many producers with their most positive cash flow in recent years. That combination helps explain the year-end rise in the financial index as well as the barometer overall,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

December marked the second consecutive month that producers reported stronger financial performance for their operations. The Farm Financial Performance Index rose 7 points to 113 in December, which is the index’s highest reading since May and 21% higher than readings obtained just before the pandemic’s onset.

Agricultural producers expressed concern about rising production costs and the availability of production inputs. When asked about the biggest concerns for their operation in the upcoming year, 47% of respondents selected higher input cost from a list that included lower crop and/or livestock prices, environmental policy, farm policy, climate policy and COVID’s impact. More than half (57%) of producers said they expect farm input prices in the upcoming year to rise by more than 20% compared to a year earlier. Nearly four out of 10 respondents said they expect input prices to rise by more than 30%.

Producers were also asked if they’ve had any difficulty purchasing crop inputs from their suppliers for the 2022 season. Nearly four out of 10 (39%) said they’ve experienced some difficulties. In a follow-up question, producers who indicated they were experiencing difficulties in making purchases were asked which crop inputs they’ve had trouble purchasing. Responses were varied, which could be an indication of problems across the supply chain, and included difficulties in purchasing fertilizer (31%), herbicides (28%), farm machinery parts (24%) and insecticides (17%).

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The latest survey was conducted December 8-14, 2021.

Negotiated cash fed cattle trade was at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Last week, live prices were at $138/cwt. in the Southern Plains and $140 in Nebraska and the western Corn Belt. Dressed trade was at $220-$222.

Surging corn futures took Cattle futures down a peg Tuesday, especially Feeder Cattle.

Feeder Cattle futures closed an average of $1.99 lower (70¢ lower toward the back to $3.57 lower in spot Jan).

Live Cattle futures closed an average of 77¢ lower (5¢ to $1.52 lower).

Choice boxed beef cutout value was 79¢ higher Tuesday afternoon at $266.82/cwt. Select was 33¢ higher at $259.23/cwt.

Bearish South American weather lit a fuse beneath soybeans, leading other grain futures along for the ride.

Soybean futures closed 27¢ to 34¢ higher through Aug ‘22 and then 12¢ to 18¢ higher in the next four contracts; mostly 2¢ higher the rest of the way.

Corn futures closed 10¢ to 20¢ higher through the front four contracts and then mostly 4¢ to 8¢ higher.

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Major U.S. financial indices closed mixed Tuesday, with most of the pressure coming from tech stocks. 

The Dow Jones Industrial Average closed 214 points higher. The S&P 500 closed 3 points lower. The NASDAQ was down 210 points.

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“The pandemic has significantly altered how our economy functions, with the greatest impact coming from what we consume. Through October, in 2021 Americans spent 18% more on goods and about 1% less on services than they did in 2019. Compounded by a labor shortage, it is easy to see why supply chains have become one of the biggest economic challenges of the pandemic — demand has significantly exceeded the capacity of our existing system,” according to the 2022 Year Ahead Report from CoBank’s Knowledge Exchange.

CoBank analysts expect the U.S. farm economy to continue struggling with the ongoing supply chain dysfunction and cost inflation issues that emerged in the summer of 2021. They say historically strong prices will be more than offset by increases in cost structure for nearly all crop production including row crops, fruits and vegetables, and hay. They do not anticipate any significant pullback in farm-level costs until the third quarter of this year, at the earliest.

Moreover, according to the report, “Wage rates and overall labor costs are expected to remain firmly higher in 2022 as the industry seeks solutions to reduced labor availability. Automation capital expenditures at the plant level will continue in earnest despite the rapidly rising costs of machinery and equipment. Most processors view this as a necessary cost of doing business moving forward.”

However, CoBank analysts also explain, “Livestock producer margins should continue to be generally favorable overall, with the effect of shrinking beef cattle supplies finally showing up in higher prices at the producer level.”

Negotiated cash fed cattle trade ranged from a standstill to mostly inactive with very light demand through Monday afternoon, according to the Agricultural Marketing Service.

Last week live prices were at $138/cwt. in the Southern Plains and $140 in Nebraska and the western Corn Belt. Dressed trade was at $220-$222.

The five-area direct average steer price last week of $139.59/cwt. on a live basis was $3.95 higher than the previous week. The average steer price in the beef was $3.58 higher at $220.89.

Year-to-date estimated total cattle slaughter through Dec. 27 was 32.66 million head, according to USDA. That was 958,000 head more (+3.0%) than a year earlier. Total estimated beef production of 27.05 billion lbs. was 694.4 million lbs. more (+2.6%).

Cattle futures eased lower Monday awaiting cash direction.

Live Cattle futures closed an average of 38¢ lower, not counting newly minted away-Jun.

Feeder Cattle futures closed an average of 45¢ lower.

Choice boxed beef cutout value was 77¢ higher Monday afternoon at $266.03/cwt. Select was 67¢ higher at $258.90/cwt.

Corn futures closed mostly 1¢ to 2¢ higher, except for fractionally lower to 4¢ lower in the front four contracts.

Soybean futures closed 12¢ to 16¢ higher through Sep ‘23 and then 7¢ to 8¢ higher.

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Major U.S. financial indices climbed higher Monday, buoyed by tech stocks.

The Dow Jones Industrial Average closed 246 points higher. The S&P 500 closed 30 points higher. The NASDAQ was up 187 points.

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“During December the price for 500-600-lb. steers in South Dakota briefly averaged above $190/cwt. for a couple of weeks, a level last observed in early 2016,” says Matthew Diersen, risk and business management specialist at South Dakota State University, in the latest issue of In the Cattle Markets. “The value of calves depends on the expectations for their ultimate value as finished animals. Thus, the price of calves expected in 2022 depends on where the trade thinks the price of fed cattle will be in mid-2023. The LMIC (Livestock Marketing Information Center) projections have the price of fed cattle higher in 2022 than in 2021 with a further increase expected in 2023. That bodes well for calf price expectations and the LMIC projections are for higher calf prices in 2022, but prices can still fluctuate.”

On the other side of the equation, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University stresses the need to focus on feed cost management in order to capitalize on the optimistic revenue outlook.

“In part, marketing forage involves considering cattle production and marketing alternatives that represent higher value for forage,” Peel explains, in his weekly market comments. “For cow-calf producers, this includes considerations for marketing calves at weaning or retaining calves for backgrounding/stocker production as well as marketing cull breeding animals.

“The market environment in 2022 may provide more possibilities with reduced cattle numbers favoring weaned calf production and marketing, yet at the same time, higher grain prices and elevated feedlot cost of gain increase the value of added forage-based weight gain on feeder cattle. Producers will have more options and potential to add value, and planning now can improve returns to cattle and forage production later.”

You can watch Peel share his market outlook for next year here.

Negotiated cash fed cattle prices gained last week amid holiday-lightened trade. For the week, based on USDA reports available through Thursday, live prices were $2 higher in Nebraska at $140/cwt., $3 higher in the Texas Panhandle at $138 and $5 higher in the western Corn Belt at $140. Dressed prices of $220-$222 were $3-$4 higher in Nebraska and $3-$5 higher in the western Corn Belt.

Live Cattle futures traded sideways amid light trade on Friday. They closed narrowly mixed, from an average of 16¢ lower in the front three contracts to an average of 33¢ higher.

Feeder Cattle futures were traded lightly, too, but had the benefit of further erosion in front-month Corn futures. They closed an average of 81¢ higher (5¢ higher at the back to 95¢ higher toward the front), except for 35¢ lower in Sep.

Stronger cash prices and stabilizing wholesale beef prices enabled Cattle futures to gain from Monday through Friday.

Live Cattle futures closed an average of $1.06 higher (42¢ to $1.60 higher). Feeder Cattle futures closed an average of $4.15 higher during the same period ($2.37 higher at the back to $6.67 higher toward the front). The CME Feeder Cattle Index closed $5.99 higher week to week on Thursday at $165.21/cwt.

Choice boxed beef cutout value was 78¢ higher on Thursday at $265.26, compared to Monday. Select was $3.05 higher at $258.23.

Grain futures lost ground throughout the week, due in part to rains in South America.

Corn futures closed an average of 17¢ lower on Friday through the front six contracts, compared to Monday, except for fractionally lower in spot Mar. During the same period, Soybean futures closed an average of 28¢ lower through the front six contracts,

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Major U.S. financial indices eased lower again Friday as investors closed out positions for the year, amid lighter holiday trade.

The Dow Jones Industrial Average closed 59 points lower. The S&P 500 closed 12 points lower. The NASDAQ was down 96 points.

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Restaurant customers can expect to see health taking center stage on restaurant menus in 2022, according to the National Restaurant Association’s (NRA) recent annual What’s Hot Culinary Forecast. It details topics, trends, and products expected to drive restaurant menus in the coming year across a variety of categories.

For instance, after demand for comfort food surged during the height of the pandemic, consumers are refocusing on better-for-you options, with foods that are believed to have immunity-boosting qualities and plant-based sandwiches making up three of the Top 10 Trends for 2022. The report adds plant-based proteins are growing in popularity on menus and less expensive cuts of protein, such as thighs instead of wings, will have a greater presence in the year to come.

Moreover, according to NRA, sustainability will continue to influence menus and how restaurants make decisions across the board. From reusable and recyclable packaging to zero-waste options, restaurants are continuing to prioritize sustainable initiatives. As consumers continue to utilize off-premises options in all dayparts, restaurants are looking to translate their dine-in experience outside the four walls of the restaurant with thoughtful packaging that maintains food quality, retains temperature, and is tamper-proof.

“In addition to a return to health-focused menu offerings and more eco-friendly, improved off-premises packaging, all of which rated high in the top trends, we’re expecting operators to look across their menus for transformative opportunities,” said Hudson Riehle, senior vice president of Research for the Association. “Look for trends that fuse the traditional meal daypart items with other dayparts and an increasing popularity of snacking and its allied items. Also, with the popularity of cocktails-to-go during the pandemic, restaurants will look to expand both alcoholic and non-alcoholic craft beverage options.”