WLI

The average five-area direct fed steer price was $3.21 higher on a live basis last week at $112.44/cwt. The average steer price in the beef was $4.98 higher at $177.56.

Monday’s negotiated cash fed cattle trade summary was unavailable from AMS at press time.

Through Friday afternoon, prices were $3-$4 higher on a live basis in the Northern Plains at mostly $113/cwt. Dressed sales in Nebraska were $5 higher at $178.

On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Softer Corn futures early on Monday, along with last week’s stronger cash prices, helped Cattle futures mostly gain.

Live Cattle futures closed an average of 76¢ higher, except for an average of 16¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.08 higher (20¢ higher in spot Mar to $2.55 higher toward the back).

Corn futures closed mostly 1¢ to 3¢ higher.

Soybean futures closed mostly 9¢ to 12¢ higher through Sep ‘22, except for 3¢ to 4¢ lower in the front three contracts.

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Major U.S. financial indices closed sharply higher Monday, likely helped along by new-month positioning, and ahead of more corporate earnings reports this week.

The Dow Jones Industrial Average closed 229 points higher. The S&P 500 closed 59 points higher. The NASDAQ was up 332 points.

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“Both the inventory of beef replacement heifers, at 18.7% of the beef cow herd, and the number of heifers calving are at a level that does not indicate either herd liquidation or expansion, though the levels could support limited herd expansion in the coming year,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, reflecting on Friday’s semi-annual USDA Cattle report.

Likewise, in the latest issue of In the Cattle Markets, Matthew Diersen, a risk and business management specialist at South Dakota State University says, “The main takeaways were the stabilization of inventories, the smaller calf crop and fewer cattle outside of feedlots. The inventory levels have increased or consolidated in the Plains states, stretching from North Dakota to Texas, with levels generally lower elsewhere.”

Peel points to the drought-induced 14.5% year-over-year decline in Colorado beef cows and the 16.1% decrease in Colorado beef replacement heifers as perhaps the most notable headline from the Jan. 1 inventory numbers.

For those keeping score, Peel also notes the number of cattle grazing small grains pasture in Kansas, Oklahoma and Texas were 7.5% more year over year at 1.73 million head. He adds that the total estimated feeder supply of 7.245 million head in those same states was 1% more.

“In general, U.S. cattle inventories show little direction and are more stable than anything,” Peel says. “Market conditions, and perhaps drought in the coming months will determine the direction of cattle numbers in 2021 and beyond.”   

Negotiated cash fed cattle prices were $3-$4 higher on a live basis in the Northern Plains on Friday at mostly $113/cwt., according to the Agricultural Marketing Service. That was with slow trade and light demand. Dressed sales in Nebraska were $5 higher at $178.

There were a few live sales in the Southern Plains at $113 and a few dressed trades in the western Corn Belt at $178, but too few to trend.

On Thursday, live sales in the western Corn Belt were $2-$7 higher at $112. Dressed trade the previous week was at $170-$173.

The prior week, live sales were at $110-$111 in the Texas Panhandle and at $110 in Kansas. On Friday, the Texas Cattle Feeders Association reported its members trading cattle at just over $2 more week to week: $112.80 for steers and $112.91 for heifers.

Despite higher cash cattle prices and increasing wholesale beef values, Cattle futures closed lower Friday, as grain futures continued to climb. Month-end position squaring likely played a role, too.

Live Cattle futures closed an average of $1.23 lower.

Feeder Cattle futures closed an average of $1.96 lower.

Corn futures closed mostly 3¢ to 6¢ higher mixed, except for 9¢ to 12¢ higher in the front three contracts.

Soybean futures closed 10¢ to 16¢ higher through Sep ‘22, and then 7¢ to 9¢ higher.

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Major U.S. financial indices closed sharply lower Friday, pressured by more investor worries about the potential impact from short sellers being challenged by buyers in stocks like GameStop.

The Dow Jones Industrial Average closed 620 points lower. The S&P 500 closed 73 points lower. The NASDAQ was down 266 points.

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The nation’s beef cow herd began this year with 31.16 million head, according to the semi-annul Cattle report from USDA on Friday. That’s 181,000 head fewer or 0.58% less than the previous year.

The number of beef heifers retained for replacement of 5.81 million head was 3,200 head more than the previous year, just 0.06% more.

As of Jan. 1, the calculated number of calves outside feedlots was 25.66 million head, which were 62,000 head fewer (-0.24%) than a year earlier. That’s 3.35% less than 2 years earlier.

Milk cows Jan. 1 of 9.44 million head were 97,400 (+1.04%) more than the previous year.

The inventory of all cattle and calves was estimated at 93.59 million head, down 198,000 (-0.21%) from a year earlier.

Negotiated cash fed cattle trade was limited on light demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $112/cwt., which was $2 higher than last week.

Trade was mostly inactive on light demand in Nebraska and the western Corn Belt with too few transactions to trend. It was at a standstill in the Texas Panhandle and Colorado.

The average dressed steer weight the week ending Jan. 16 was 925 lbs., which was 2 lbs. heavier than the previous week and 18 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 1 lb. lighter than the prior week but 16 lbs. heavier than the previous year.

Cattle futures edged lower Thursday amid light trade. 

Live Cattle futures closed an average of 38¢ lower, except for 7¢ higher in near Apr.

Feeder Cattle futures closed an average of 41¢ lower, other than 7¢ and 10¢ higher at either end of the board.

Choice boxed beef cutout value was $2.33 higher Thursday afternoon at $231.99/cwt. Select was $1.89 higher at $220.88.

Corn futures closed fractionally mixed to 1¢ higher through the front three contracts, 3¢ lower through Jly ‘22, and then mostly fractionally lower.

Soybean futures closed mostly 14¢ to 21¢ lower.

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Major U.S. financial indices rebounded Thursday, paring some of the steep losses from the previous session. Support included estimate-beating quarterly corporate earnings from the likes of American Airlines and Apple.

Although a bit less than traders expected, fourth-quarter GDP came in at 4.0%, according to the U.S. Bureau of Economic Analysis.

Also, weekly initial unemployment insurance claims came in less than expected at 847,000, according to the U.S. Department of Labor. That was 67,000 fewer than the previous week.

The Dow Jones Industrial Average closed 300 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 66 points.

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“As the U.S. foodservice sector climbs out of the hole left by 2020, the animal protein sector will not only need to realign itself with the survivors of the last year, but also remain flexible,” says Will Sawyer, lead animal protein economist with CoBank.

In the new Great Grocery Grab report from CoBank’s Knowledge Exchange Division, Sawyer explains the importance of individual foodservice channels varies significantly by animal protein species and by producer.

For instance, ground beef makes up a majority of beef volume through foodservice, but it represents only about one-third of the value due to its low price point. Conversely, the high-value steaks and roasts that are primarily sold in full-service restaurants and hotels comprise a quarter of the volume of beef sold through foodservice but nearly half of beef sales.

Some foodservice channels rebounded through the pandemic to achieve sales growth, as evidenced by the positive comparable-store sales at quick-service and fast casual restaurant concepts since the summer.

Full-service restaurants, however, continue to face double-digit declines in sales. In November, full-service restaurant sales were down 36% compared to last year while total foodservice sales were down 17%. Sawyer adds that in-restaurant dining will be vulnerable as long as consumers remain wary of dining indoors and COVID-19 cases remain elevated.

Although foodservice sales continue to improve, the report suggests sales may not return to pre-pandemic levels until the second half of 2022.

Relative to the realignment and flexibility mentioned earlier, according to the report, “In many cases that includes the large, publicly traded, franchise and multi-location limited-service restaurants. For beef, that could very well mean a long-term shift in high-value steak consumption to retail as the upscale restaurants have been especially hard hit and seen a significant number of closures.”

Negotiated cash fed cattle trade was at a standstill in Kansas and the Northern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on light demand, with too few transactions to trend. With that said, early indications point toward higher prices.

Cattle feeders offered 1,570 head (11 lots) in Central Stockyard’s weekly Fed Cattle Exchange Auction, all from the Southern Plains. Of those, 1,128 head (seven lots) sold for a weighted average price of $112.97/cwt. ($112.95 for steers and $113.00 for heifers). The marketing method included both live weight and Bid-the-Grid™. Country trade in the region last week was at $110-$111.

Also, slaughter steers and heifers traded $3-$4 higher in the fat auction at Sioux Falls Regional, where 128 head of Choice 3-4 steers brought an average price of $110.06. That’s at the top end of the $105-$110 paid in country trade last week.

Cattle futures closed lower Wednesday with Live Cattle pressured by the lack of cash direction and lower outside markets, while Feeder Cattle continued to adjust to the rebound in Corn futures.

Live Cattle futures closed an average of 54¢ lower.

Feeder Cattle futures closed an average of 92¢ lower, from 2¢ lower in the spot contract to $1.67 lower at the back.

Choice boxed beef cutout value was 66¢ higher Wednesday afternoon at $229.66/cwt. Select was $1.66 higher at $218.99.

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

Soybean futures closed 2¢ to 4¢ higher through Sep ‘21 and then mostly 3¢ to 5¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday. Various analysts placed the most blame on disappointing corporate quarterly earnings. There were also growing concerns that the short-seller scourge in stocks like GameStop and AMC was inflicting enough damage on particular hedge funds to fuel negative ripples in other parts of the market.

The Dow Jones Industrial Average closed 633 points lower. The S&P 500 was down 98 points. The NASDAQ was down 355 points. 

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Recent data from the NPD Group (NPD) underscores how far the U.S. restaurant industry rebounded so far from the economic devastation wrought by dine-in closures and other pandemic disruptions.

Although mandated dine-in restrictions held back all restaurant segments, particularly full service, NPD researchers say consumer demand for restaurant meals, and the ability to serve the demand with a host of off-premises services enable the industry to persevere.

For instance, restaurant digital orders, were already increasing before the pandemic (+19% year over year in January 2020), but exploded through the pandemic, up 145% year over year in December, according to NPD’s daily tracking of consumers’ use of restaurants and other foodservice outlets.

Similarly, carry-out, delivery, and drive-thru were also growing before the pandemic.

Carry-out, which represents the largest share of off-premises modes, increased orders by 3% in January 2020 and by 10% in December, compared to a year earlier. Carry-out ended 2020 holding 46% of off-premises order share.

Delivery orders were 1% higher year over year in January and ended the year up 137%. Even with the triple-digit gain in orders, delivery still holds the smallest off-premises order share at 11%.

Drive-thru orders in 2020 increased from +4% year over year in January to +22% in December, ending the year with a 44% share of off-premises orders.       

“Digital orders for pick-up and all off-premises modes will be a growth engine for the U.S. restaurant industry moving forward,” says David Portalatin, NPD food industry advisor. “Consumers, both new and former users, have now experienced the convenience of digital ordering, especially for carry-out and delivery, and will continue using these services long after the pandemic is over.”  

Negotiated cash fed cattle trade was at a standstill in the Northern Plains and the Southern Plains through Tuesday afternoon, according to the Agricultural Marketing Service. Trade in the western Corn Belt was inactive on very light demand.

Heavy snow in parts of Nebraska and Kansas could help push trade to later in the week.

Live Cattle futures closed an average of 44¢ higher Tuesday, supported by rising wholesale beef values.

Choice boxed beef cutout value was $2.33 higher Tuesday afternoon at $229.06/cwt. Select was $1.12 higher at $217.33.

Feeder Cattle futures, however, closed an average of $1.80 lower, pressured by another day of sharply higher grain futures.

Corn futures closed 11¢ to 20¢ higher through Sep ‘21, 2¢ to 4¢ higher through Jly ’22 and then mostly 2¢ higher.

Soybean futures closed 17¢ to 26¢ higher through Jan ‘22 and then 11¢ to 16¢ higher.

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Major U.S. financial indices closed marginally lower Tuesday.

The Dow Jones Industrial Average closed 22 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 9 points.

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If recent data is any indication, the U.S. likely started 2021 with fewer beef cows than last year.

“On Thursday, the monthly Livestock Slaughter report revealed what many industry analysts have been watching all year,” say analysts with the Agricultural Marketing Service (AMS). “The 2020 preliminary Federally Inspected (FI) steer slaughter was near 3% below the previous year and over 4% below the three-year average. Heifer slaughter was nearly 4% below a year ago and nearly 3% larger than the three-year average.”

Further, AMS analysts explain 2020 FI beef cow slaughter was 2% more than the previous year and 9% more than the three-year average.

“The estimates for the feedlot mix Jan. 1, 2021 were 61.85% steers and 38.15% heifers. This is up slightly from these same estimates in October 2020 and very near the feedlot mix reported in January 2020,” says Josh Maples, Extension livestock economist at Mississippi State University, in the latest issue of In the Cattle Markets. “The percentage of heifers in the feedlot mix trended up from 2015-2019 as a result of the cattle cycle, but 2020 quarterly totals were slightly lower than 2019, due in part to the feedlot disruptions in the spring and summer.”

Depending on the economist, estimates are for the beef cow herd to be 0.5-1.0% less year over year.

USDA’s Cattle report, providing Jan. 1 estimates of the U.S. cattle inventory will be published Friday afternoon.