WLI

Negotiated cash fed cattle trade developed in the Southern Plains Wednesday with live sales at $118-$119/cwt., but mostly $119, which was mostly $2 less than last week.

Southern Plains cattle selling in the weekly Fed Cattle Exchange auction also brought $119. There were 413 head offered; 315 head sold for delivery at 1-9 days.

Even so, Cattle futures finally clawed back some losses amid oversold conditions.

Except for 12¢ and 2¢ lower on either end of the board, Live Cattle futures closed an average of 56¢ higher.

Feeder Cattle futures closed an average of 76¢ higher.

Wholesale beef values were lower on Choice and higher on Select with light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.52 lower Wednesday afternoon at $206.31/cwt. Select was 77¢ higher at $205.30.

Corn futures closed 1¢ to 3¢ higher through Jly ’21 and then mainly unchanged.

Soybean futures closed 2¢ to 7¢ higher through Nov ’20 and then mostly 1¢ to 3¢ lower.

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Major U.S. financial indices bounced higher Wednesday, buoyed by more reports that the spread of coronavirus is slowing

The Dow Jones Industrial Average closed 275 points higher. The S&P 500 closed 21 points higher. The NASDAQ was up 87 points.

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Customer transactions at U.S. restaurant chains were up in January, a benefit of milder weather compared to a year ago when extreme weather conditions and above average precipitation hit many areas of the U.S.

For the retail weeks ending January 6 through February 2, total restaurant transactions increased by 2% over same time last year and quick service restaurant (QSR) chains were the primary contributor, according to NPD’s CREST® Performance Alerts, which provides a weekly view of chain-specific transactions and share trends for 73 quick service, fast casual, midscale, and casual dining chains.

“January is historically one of the toughest months for U.S. restaurants and bad weather is usually a contributor,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America.

QSR chains, which represent the bulk of industry transactions, grew transactions by 2% in January following four consecutive weeks of gains compared to the declines experienced last January. However, the full service restaurant segment, which includes casual dining and midscale/family dining chains, experienced transaction declines throughout the month. Customer transactions at casual dining restaurants declined by 4% and midscale/family dining transactions decreased by 2%, according to NPD.

Although too few to trend, negotiated cash fed cattle trade took on a lower feel Tuesday with early live trades in Kansas and Nebraska at $119-$120/cwt., compared to $121 last week.

Cattle futures continued lower, pressured by the softer tone of the cash market.

Live Cattle futures closed an average of $1.11 lower (67¢ to $1.50 lower).

Feeder Cattle futures closed an average of $1.10 lower.

Wholesale beef values were lower on Choice and higher on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.08 lower Tuesday afternoon at $207.83/cwt. Select was 83¢ higher at $204.53.

Corn futures closed mostly 1¢ lower.

Soybean futures closed unchanged to fractionally higher.

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Major U.S. financial indices paddled in place Tuesday with various reports suggesting the spread of novel coronavirus is slowing.

The Dow Jones Industrial Average closed fractionally lower. The S&P 500 closed 5 points higher. The NASDAQ was up 10 points.

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The latest World Agricultural Supply and Demand Estimates (WASDE) increased projected beef production for this year by 40 million lbs. compared to the January estimate at 27.48 billion lbs.

“The beef production forecast is raised from the previous month on higher cattle slaughter and heavier cattle weights in the first half of the year. However, the forecasts for second-half beef production is reduced on lower anticipated steer and heifer slaughter in the second half of the year,” explain USDA analysts. “This reflects a smaller number of cattle outside feedlots implied by the Jan. 1 Cattle report which results in lower placements during 2020.”

Total red meat and poultry production was projected 634 million lbs. more at 108.79 billion lbs.

The annual fed steer price (five-area direct) was projected at $117/cwt: $123 for the first quarter; $118 for the second; $112 for the third; $114 for the fourth quarter.

Among other WASDE highlights:

Corn

U.S. corn ending stocks were unchanged from the previous month. The season-average corn price received by producers was also unchanged at $3.85/bu. 

Soybeans

This month’s 2019-20 U.S. soybean outlook is for increased exports and lower ending stocks.

Soybean ending stocks were reduced 50 million bu. to 425 million, partly reflecting increased imports for China.

The U.S. season-average soybean price for 2019-20 was forecast at $8.75/bu., down 25¢, reflecting reported prices to date. The soybean oil price forecast was lowered 0.5¢ to 33.5¢/lb. The soybean meal price forecast was unchanged at $305/short ton.

Negotiated cash fed cattle prices ended last week $1 lower on a live basis at $121/cwt. in the Southern Plains and Nebraska; $121-$122 in the western Corn Belt. Dressed trade was $1-$2 lower at mostly $193.

Softer cash prices, declining wholesale beef values and queasiness over demand from a potentially slowing global economy weighed on Cattle futures to start the week.

Live Cattle futures closed an average of 76¢ lower.

Except for 5¢ and 2¢ higher in the front two contracts, Feeder Cattle futures closed an average of 97¢ lower (12¢ to $1.22 lower).

Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.21 lower Monday afternoon at $208.91/cwt. Select was 19¢ lower at $203.70.

Corn futures closed narrowly mixed but mostly 1¢ lower.

Soybean futures closed mostly unchanged to fractionally higher.

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Major U.S. financial indices on Monday regained most or all of what was lost in the previous session, led by tech stocks.

The Dow Jones Industrial Average closed 174 points higher. The S&P 500 closed 24 points higher. The NASDAQ was up 107 points.

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Folks in the cattle and beef business have plenty of work ahead to correct the consumer misinformation surrounding fake meat.

In an online survey of more than 1,800 consumers, less than half of the respondents understood the labeling term “plant-based beef” was intended to describe an entirely vegetarian or vegan food product.

Approximately one third of surveyed consumers believed that plant-based fake meat products contained at least some real beef in them.

The National Cattlemen’s Beef Association (NCBA) commissioned the survey. Results were released last week.

When asked to evaluate specific product labels and marketing materials from some of the leading plant-based fake beef products currently on the market:

Nearly two-thirds of respondents believed the fake meat products produced by Beyond Meat, Impossible Foods and LightLife contained real beef or some form of animal byproduct.

32% of consumers who were shown a package of Beyond Meat’s “Beyond Burger” plant-based patties (which features a cow icon) told researchers that they thought the patties contained at least small amounts of real meat. It contains no beef.

37% of consumers who were shown a package of Lightlife’s “Gimme Lean”, which features the word “Beef” highlighted in a red box, said the product contained at least some real beef. It contains no beef.

“The fact that so many consumers look at these labels and think that the products include meat or other animal byproducts is a clear sign that the misleading labeling and deceptive marketing practices of plant-based fake meat companies has caused real consumer confusion,” says NCBA past president Jennifer Houston. “Many of these fake-meat products purposely use graphics and words that trade on beef’s good name, and it needs to stop immediately. Consumers rely on names and product packaging to inform their purchasing decisions, and they have a right to know that this information is accurate and not misleading.”

When asked to rank plant-based fake meat versus beef on a host of food attributes:

44% of consumers believed plant-based products were lower in sodium, when leading plant-based fake beef is anywhere between 220 to 620% higher in sodium than the same size serving of real ground beef. Just 24% of respondents correctly identified beef as being lower in sodium.

34% of respondents believed plant-based fake meat to be less processed than genuine beef and another 34% believed fake and real beef products were equivalent on the food processing scale. Scientifically speaking, beef is considered to be an unprocessed or minimally processed food, whereas plant-based fake meat products are classified as an ultra-processed food product.

On the broad category of healthfulness, more than half of consumers believed plant-based meat was better.

“This research is a wake-up call for our industry, the news media, and for federal regulators,” Houston says. “We in the beef industry need to do a better job educating consumers about the fact that beef is a nutrient-rich source of high-quality protein and essential nutrients that can play a key role in any healthy lifestyle. We also need reporters and regulators to understand how many consumers are confused and/or misinformed about exactly what’s in these new plant-based alternatives.”

The Food and Drug Administration (FDA) has the power to prevent this sort of consumer confusion.

Negotiated cash fed cattle trade was yet to fully develop through Friday afternoon but was shaping up lower. Live prices in the Southern Plains were $1 lower than the previous week at $121/cwt. Although too few to trend, early live sales in Nebraska were also $1 lower at $121, while early dressed sales were $1-$2 lower at $193-$195.

The lack of firm cash direction and weaker outside markets helped cap Live Cattle futures and pressure Feeder Cattle as Lean Hogs continued to extend gains.

Except for 5¢ lower in away Feb, Live Cattle futures closed an average of 14¢ higher.

Feeder Cattle futures closed an average of 55¢ lower (7¢ to 92¢ lower).

Wholesale beef values were lower on Choice and sharply lower on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 81¢ lower Friday afternoon at $210.12/cwt. Select was $2.07 lower at $203.89.

Corn futures closed 3¢ to 4¢ higher through May ’21 and then mostly 1¢ higher.

Soybean futures closed unchanged to 1¢ higher through near Jly and then mostly 4¢ lower.

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Despite stronger U.S. employment numbers than expected, estimates of declining GDP growth in China, due to novel coronavirus, weighed on major U.S. financial indices Friday.

Total non-farm payroll employment rose by 225,000 in January, according to the U.S. Bureau of Labor Statistics. That left the unemployment rate little changed at 3.6%. 

Average hourly earnings for all employees on private non-farm payrolls rose by 7¢ to $28.44. Over the past 12 months, average hourly earnings increased by 3.1%.

The Dow Jones Industrial Average closed 277 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 51 points.

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Beef demand is strong and with U.S. cattle numbers plateauing, prices are likely to be stronger in the year ahead as consumers at home and abroad support industry profitability, according to CattleFax, at their 2020 Industry Outlook in San Antonio last week.

“With strong demand for U.S. beef at home and rising demand overseas, the modest increases in supply will be more than offset by a growing consumer appetite for our product,” says Kevin Good, CattleFax Vice President of Industry Relations and Analysis.

Specifically, CattleFax projects the all-fresh retail price 5¢ higher than last year at an average of $5.87/lb. and composite cutout prices $3 higher $222/cwt. 

In terms of cattle prices, Good says CattleFax projects fed steer prices to average $120/cwt. during 2020, which would $3 more than last year. He notes there is downside risk at $108 and resistance at $130.

CattleFax forecasts steer calf prices (550 lbs.) this year $6 higher than last year at an average of $170/cwt., across a range of $155-$180.

As for feeder steer prices (750 lbs.), CattleFax projects an average increase of $6, compared to last year, at an average of $150/cwt., across a range of $140-$160.

Good notes additional supplies of utility cows, the product of several years of aggressive expansion, are likely to challenge the cull cow market. However, he explains, “Increased demand for lean trim and a decline in the availability of imported grass-fed trim from Australia and New Zealand will be supportive of cow prices.” He projects utility cow prices at an average of $65/cwt., ranging from the low $70s to a fall low near $55.

CattleFax anticipates the average bred cow price steady with last year at $1,500.

On the input side of the equation, Mike Murphy, CattleFax Vice President of Research and Risk Management Services predicts acres planted to corn will increase 4 million acres to 94 million acres this year and that soybean acres will increase 7 million acres to reach 83 million acres. He pegs spot corn prices at $3.50-$4.00/bu., which would be 15¢ to 20¢/bu. less than last year, notwithstanding significant weather pressure.

“There is strong demand for our product, but that’s the result of the fact that our business has paid attention to market signals and we’ve been producing a consistent, quality product that has gained a greater piece of that retail dollar. We need to protect that,” says Randy Blach, CattleFax CEO. “We must pay attention to what the consumer is telling us. That means conversations about topics like traceability and sustainability only become more important as time goes on. We have to listen to the consumer and respond with action to meet their needs and demands if we’re going to continue to be successful in a hypercompetitive global protein market.”