WLI

Negotiated cash fed cattle trade was mostly inactive on very light demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Marketing Service. Live prices there on Tuesday were $2 lower than last week at $108/cwt.

Elsewhere, trade was slow on light demand. There were a few live trades in Nebraska at $107 and a few in the western Corn Belt at $104.50-$105.00, but too few to trend. There was some early dressed trade in both regions at $168, but also too few to trend. Last week, live prices were at $110 in Nebraska and at $109-$110 in the western Corn Belt; dressed trade at $172-$174.

Cattle futures mostly edged higher by the close Wednesday, helped by firming Lean Hog futures.

Live Cattle futures closed an average of 25¢ higher except for 47¢ lower in spot Dec.

Feeder Cattle futures closed an average of 41¢ higher except for 55¢ lower in spot Jan.

Choice boxed beef cutout value was $6.76 lower Wednesday afternoon at $218.26/cwt. Select was $3.77 lower at $201.65.

Corn futures closed mostly 3¢ to 5¢ higher through Sep ’21 and then mostly fractionally higher to 1¢ higher.

Soybean futures closed mostly 11¢ to 12¢ higher through Jly ’21 and then mostly 5¢ to 7¢ higher.

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Major U.S. financial indices closed lower Wednesday, pressured by big tech stocks and stalled federal stimulus talks.

The Dow Jones Industrial Average closed 105 points lower. The S&P 500 closed 29 points lower. The NASDAQ was down 243 points.

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“While many of the food prices have come back down off the spikes in late spring and early summer, it remains the case that retail food prices are significantly higher now than at the same time last year,” says Jayson Lusk, agricultural economist at Purdue University, in his Food Price Outlook. “In October (the last data available), prices of food at grocery were 4% higher than the same time last year. It’s been almost a decade, since 2011, that we observed this rate of annual food price inflation. Despite the restrictions on eating out, the price of food away from home was 3.9% higher in October 2020 than in October 2019; this year-over-year change is higher than has been observed in at least a decade.”

He notes meat, dairy, and egg prices are the primary drivers of higher retail food prices.

“In June 2020, prices of these products at grocery were 12.8% higher than the same time in 2019; as of October 2020, prices of these products were still running 6.1% higher than in 2019. However, the price increases are not just limited to meat and animal products. Cereal and bakery product prices were 3% higher in October 2020 compared to October 2019; Fruit and vegetable prices were 2.6% higher in October 2020 than in 2019,” Lusk says.

Closer to home, according to the Livestock Marketing Information Center (LMIC), stronger ribeye prices are supporting higher carcass cutout values.

“Wholesale ribeye (roll, 2-in lip-on) prices accelerated to new weekly record highs during the weeks of Nov. 28 and Dec. 5, reaching $1,256/cwt. This price series dates back to 1995, and the previous record high was set earlier in 2020, due to pandemic-driven supply limitations during slaughter plant closures,” say LMIC analysts, in the latest Livestock Monitor. “These new record highs are thought to be supported by better than expected demand this holiday season. It is likely retailers were under-stocked for the demand seen late in the year. The rib primal cuts have become a feature in recent years. The wider availability of Prime graded beef and the inclusion of it at certain major retailers across the country has made a difference and elevated home meal use.”

Moreover, the LMIC folks point out that through last week the Chuck gained an average of 3.4% for the last five weeks, while the Round increased an average of 2.5%.

“Usually, Chuck primal values decline heading into the end of the year before increasing in the first quarter,” LMIC analysts explain. “Similarly, Rounds and Loins also do not typically have high points around this time of year but all are above a year ago and showing strength. Demand for beef seems to be what is helping these products, but other beef cuts have faded into the background. Lean beef trimmings have declined significantly since summer and have not recovered, even though total cow slaughter is down. It seems demand for ground product has eroded significantly as the pandemic has persisted.”

Looking ahead, Lusk says USDA’s Economic Research Service projects food inflation to moderate in 2021—1-2% for food at home compared to the 20-year historic average of 2.8% and 2-3% for food away from home, compared to 2.3% for the 20-year historic average.

“Even if food price inflation reverts to historical norms, this just means that prices have stopped increasing as fast as in 2020. Price levels remain higher than they were previously. As such, it will be important to keep an eye on food affordability and measures of food insecurity in 2021,” Lusk says.

Negotiated cash fed cattle trade started the week at lower money Tuesday. Live prices were $2-$4 lower in the Texas Panhandle at $108/cwt. and $2 lower in Nebraska at $108, according to the Agricultural Marketing Service. That was on slow trade and light demand. There were a few dressed sales in the western Corn Belt at $168, but too few to trend. Last week, dressed trade was at $172.

The five-area direct November weighted average fed steer price was $108.85/cwt. on  a live basis, which was $2.20 more than the previous month, but $6.50 less than the previous year. The weighted average steer price in the beef was $170.34, which was $2.87 more than the prior month but $12.20 less than the prior year.

Cattle futures closed narrowly mixed on Tuesday, finding some stability following the strong retreat in the previous session, perhaps helped along by softer grain futures.

Live Cattle futures closed an average of 14¢ lower except for unchanged to 17¢ higher in three contracts.

Feeder Cattle futures closed an average of 45¢ higher except for 22¢ lower in spot Jan.

Choice boxed beef cutout value was $5.78 lower Tuesday afternoon at $225.02/cwt. Select was $4.06 lower at $205.42.

Corn futures closed mostly 1¢ to 3¢ lower.

Soybean futures closed mostly 6¢ to 12¢ lower through Sep ’21 and then mostly unchanged to 2¢ lower.

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Major U.S. financial indices closed higher Tuesday, apparently buoyed in part by the rollout of COVID-19 vaccinations in the United Kingdom and optimism regarding a federal stimulus package.

The Dow Jones Industrial Average closed 104 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 62 points.

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“Beef production is forecast to decrease in 2021 with cyclically smaller cattle numbers and carcass weights retreating from record 2020 levels,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Beef trade is expected to improve with smaller beef imports and increased beef exports in the coming year. These will combine with decreased production to reduce per capita beef consumption in 2021.”

For this year, David Anderson, Extension livestock economist at Texas A&M University explains total beef production is on par with the same time last year.

“Steer and heifer slaughter is a little over 3% behind 2019 at this point. Total cow slaughter is 1.5% below 2019, but the source of the cows is interesting. Beef cow slaughter is up 2.5% while dairy cow slaughter is down 5.5% from a year ago,” Anderson explains, in the latest issue of In the Cattle Markets. “Low calf prices and drought conditions are acting to increase cow slaughter while higher milk prices have reduced dairy cow culling.”

Anderson adds that heavier fed steer and heifer carcasses continue to support beef production despite less slaughter.

“Steer dressed weights have averaged 906 lbs. this year compared to 876 lbs. last year. Heifer weights have averaged 833 lbs. this year, up 22 lbs. from 2019. Cow and bull dressed weights are within a pound of last year’s average,” Anderson says.

Although beef production is projected lower next year, Peel says total red meat and poultry production is projected to increase to another new record level of 107.2 billion lbs. with increased pork and poultry production offsetting decreased beef production. 

“However, with strong meat exports offsetting increased production, domestic total meat consumption is projected to decrease to 222.1 lbs. per capita, down from 225.3 lbs. in 2020,” Peel says. “Many factors may cause revisions to these forecasts including the speed and effectiveness of controlling the ongoing pandemic; macroeconomic uncertainties in the U.S. and global economies; changing feed market conditions; currency exchange rates; and evolving trade policy, among others. Conditions remain very dynamic and uncertain at the end of 2020 but there is potential for more stability in the second half of 2021.”

Negotiated cash fed cattle trade was mostly inactive on light demand in the western Corn Belt through Monday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service.

Last week, live prices were at $110-$112/cwt. in the Texas Panhandle, $110 in Kansas and Nebraska and at $109-$110 in the western Corn Belt. Dressed trade was at $172.

The average five-area direct steer price last week was $109.75 on a live basis, which was 52¢ less than the previous week. The average steer price in the beef was $172.29, which was $1.08 lower.

Cattle futures closed lower on Monday, pressured by fast-falling wholesale beef values and sluggish trade.

Live Cattle futures closed an average of 93¢ lower except for an average of 12¢ higher in the back two contracts.

Feeder Cattle futures closed an average of $1.33 lower.

Choice boxed beef cutout value was $4.22 lower Monday afternoon at $230.80/cwt. Select was $8.03 lower at $209.48.

Corn futures closed 1¢ to 3¢ higher.

Soybean futures closed mostly 5¢ to 7¢ higher except for fractionally lower to 4¢ lower in the front three contracts.

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Major U.S. financial indices closed mixed Monday, pressured by the continued increase in COVID-19 cases and lack of resolution for additional federal economic stimulus.

The Dow Jones Industrial Average closed 148 points lower. The S&P 500 closed 7 points lower. The NASDAQ was up 55 points. 

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Exports of U.S. beef muscle cuts in October were higher year over year, however, reduced variety meat volumes pushed total beef exports slightly lower, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Specifically, beef muscle cut exports in October were 5% more in volume at 85,445 metric tons (mt) and 1% more in value at $573.8 million. For January-October, muscle cut exports were 5% below last year in volume (791,694 mt) and 8% lower in value ($5.48 billion).

Overall beef exports in October were slightly lower than a year ago at 107,591 mt (down 0.4%), valued at $646 million (down 0.5%). For January through October, total beef exports trailed last year’s pace by 7% in volume (1.02 million mt) and 8% in value ($6.2 billion).

There were signs of promise, though. Beef exports to China set another new record and volumes were above year-ago levels to Japan, Taiwan, Central America and Africa. While still below last year, beef exports to Mexico were the most since March.

U.S. pork exports posted broad-based gains in October, solidifying 2020’s record pace. They were up 8% year-over-year to 242,536 mt. Value was also 8% higher at $641.1 million. Through the first 10 months of the year, pork exports were 15% ahead of last year’s record pace at 2.46 million mt, with value up 16% to $6.33 billion.

“While the tight labor situation continues to limit the cut and variety meat specifications available for export, red meat demand is strengthening in many critical markets,” says USMEF President and CEO Dan Halstrom. “October exports of bone-in hams, for example, were near the July record and up 50% from a year ago. This has been a volatile year, filled with shifts in consumer preferences and a lot of uncertainty for international buyers. But the U.S. industry has responded positively to these challenges and the demand dynamics for red meat are quite strong as we approach year’s end. When the gains made at retail over the past several months are combined with a stronger food service recovery, the prospects for export growth are very promising.”

Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.

For the week, live prices were $1 lower to $1 higher in the Texas Panhandle at $110-$112/cwt. They were $1 lower in Kansas at $110. Live prices were steady to $1 lower in Nebraska at $109-$110 and steady to $1 lower in the western Corn Belt at $109. Dressed trade was steady to $2 lower at $172-$174.

Through Thursday, the five-area direct weighted average steer price was $109.77 on a live basis, which was 40¢ lower than the previous week and $9.18 less than the same week last year. The average steer price in the beef was $1.10 lower week to week at $172.29; $15.45 lower year over year.

Cattle futures mostly closed lower on Friday, but found some footing in the wake of the previous session’s strong decline.

Live Cattle futures closed an average of 24¢ lower except for an average of 12¢ higher in the back two contracts.

Feeder Cattle futures closed narrowly mixed from an average of 14¢ lower to an average of 8¢ higher.

Choice boxed beef cutout value was $4.17 lower Friday afternoon at $235.02/cwt. Select was $2.42 lower at $217.51.

Corn futures closed 2¢ to 6¢ lower through Sep ’21 and then mostly fractionally lower.

Soybean futures closed 1¢ to 5¢ lower through Jan ’22 and then fractionally higher.

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Major U.S. financial indices closed higher Friday, despite a less robust national employment report than the trade expected.

Total non-farm payroll employment rose by 245,000 in November, according to the U.S. Bureau of Labor Statistics. The national unemployment rate edged lower to 6.7%.

There was some speculation the optimistic trade for the day was based on the weaker employment numbers increasing odds for the government to come up with a more robust stimulus package.

The Dow Jones Industrial Average closed 248 points higher. The S&P 500 closed 32 points higher. The NASDAQ was up 87 points.

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Despite and because of the pandemic, USDA’s Economic Research Service estimated net farm income and net cash farm income to be significantly higher this year. Reasons for the shift higher include reduced cost, increased crop receipts and the sharp increase in government payments.

Specifically, in its Highlights from the Farm Sector Income Forecast, ERS forecasts net farm income to increase by $36.0 billion (+43.1%) in 2020 to $119.6 billion. In inflation-adjusted 2020 dollars, net farm income is forecast to increase $35.0 billion (+41.3%) from 2019, increasing for the fourth consecutive year. If realized, net farm income in 2020 in inflation-adjusted terms would be at its highest level since 2013: 32.0% above the 2000-19 average of $90.6 billion.

ERS projects net cash farm income to be $24.7 billion higher (+22.6%) year over year in 2020 to $134.1 billion. Inflation-adjusted net cash farm income is forecast to increase $23.4 billion (+21.1%) from 2019, which would put it at its highest level since 2014: 22.5% above the 2000-19 average ($109.5 billion).

By way of definition, ERS analysts explain net cash farm income encompasses cash receipts from farming as well as farm-related income, including government payments, minus cash expenses. It does not include noncash items, such as inventory changes and economic depreciation, which are included in net farm income.

Cash receipts in 2020, for all commodities, are forecast to decrease $3.2 billion (-0.9%) to $366.5 billion, in nominal terms. Total animal/animal product receipts are expected to decrease $9.7 billion (-5.5%) with declines in receipts for broilers, cattle/calves, and hogs. On the other hand, total crop receipts are expected to increase $6.5 billion (+3.3%) from 2019 levels.

Direct Government farm payments are forecast at $46.5 billion in 2020, an increase of $24.0 billion in nominal terms (+107.1%), fueled by supplemental and ad hoc disaster assistance for COVID-19 relief.

Negotiated cash fed cattle prices continued steady to lower on Thursday with live trade in Kansas $1 lower at $110, steady to $1 lower in Nebraska at $109-$110. Dressed trade in Nebraska was steady to $2 lower at $172-$174.

Cattle futures closed lower on Thursday, pressured by softer cash prices, lower wholesale beef values and another day of higher front-month corn futures.

Live Cattle futures closed an average of 82¢ lower.

Feeder Cattle futures closed an average of $1.36 lower from 95¢ lower to $2.00 lower in spot Jan.

Choice boxed beef cutout value was $1.70 lower Thursday afternoon at $239.19/cwt. Select was $3.02 lower at $219.93.

Corn futures closed 2¢ to 3¢ higher.

Soybean futures closed 10¢ to 16¢ higher through Sep ’21 and then mostly 7¢ to 8¢ higher.

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Major U.S. financial indices closed narrowly mixed Thursday. Positive news on the day included fewer unemployment claims than traders were expecting.

Initial weekly unemployment insurance claims the week ending Nov. 26 totaled 712,000, which was 75,000 fewer than the previous week, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 85 points higher. The S&P 500 closed 2 points lower. The NASDAQ was up 27 points.

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Ranchers and farmers scored high marks with consumers in trust and sustainability efforts, according to a recent national public opinion poll from the American Farm Bureau Federation (AFBF).

Nearly nine in 10 adults (88%) trust agricultural producers, a 4% increase from AFBF’s June 2020 polling, pointing toward public recognition that food supply chain challenges brought on by the pandemic were not within the control of farmers and ranchers.

The survey of 2,200 U.S. adults found that more than half (58%) rate the sustainability practices of U.S. farmers positively, with broad agreement from a majority of adults across demographic groups. 

The survey also explored public attitudes about the environmental sustainability achievements of farmers and ranchers, as well as future direction to advance climate-smart farming. Overall, the public agrees farmers shouldn’t be expected to bear the financial burden alone. More than four in five adults (84%) say environmental sustainability and economic sustainability are both important for farmers, and most adults say both are very important. More than four in five adults also say feeding the world (84%) and farmers passing farms on to future generations (83%) are important. 

“Americans have a high level of trust in farmers, and they understand that we’re committed to protecting the soil, air and water,” said AFBF President Zippy Duvall. “We want to leave the land better than we found it for our children and grandchildren, as well as our nation. Our survey demonstrates that Americans are impressed by advancements in climate-smart farming and we look forward to building on that success.”

Looking to the future, the survey explores how Americans think sustainability efforts on farms and ranches should be funded. Seventy percent of adults say government incentives to encourage farmers to adopt additional sustainable agricultural practices would be effective. More than three-quarters of adults believe it is important for the government to fund science-based research (76%) and improve infrastructure (78%) to support agriculture.

At a time when some corporations are making sustainability commitments that include or impact agricultural production, a bipartisan majority of adults (62%) say corporations should compensate agricultural producers for the additional cost of implementing environmental practices to help achieve sustainability goals.