WLI

Negotiated cash fed cattle trade remained undeveloped through Friday afternoon, with prices for the week looking to be steady to higher.

Lower feedlot performance tied to winter weather, and apparent short covering ahead of the holiday weekend, helped boost Live Cattle futures Friday; Feeder Cattle tagged along to a lesser degree. Strong gains in Lean Hog futures also provided support.

Except for 57¢ lower in spot Feb, Live Cattle futures closed an average of 45¢ higher.

Except for 10¢ lower in March, Feeder Cattle futures closed an average of 20¢ higher.

Soybean futures moved higher Friday, presumably on adverse South American weather and hopes for trade talks; corn followed along.

Corn futures closed fractionally higher to 2¢ higher through Sep ’20 and then mostly fractionally lower.

Soybean futures closed 7¢ to 9¢ higher through Sep ’20 and then 4¢ to 5¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and light offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 65¢ higher Friday afternoon at $213.15/cwt. Select was $1.81 higher at $209.45.

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Major U.S. financial indices closed sharply higher Friday on reports that China pledged to boost U.S. imports for the next six years.

The Dow Jones Industrial Average closed 336 points higher. The S&P 500 closed 34 points higher. The NASDAQ was up 72 points.

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Choice wholesale beef value never ran as high as some anticipated heading into the holidays, but they remain higher year over year.

Through the front half of January, Choice boxed beef cutout value ranged from $212.02 to $216.64/cwt. compared to $205.14 to $210.49 a year earlier.

“The higher cutout (Choice) value stems from higher middle meat prices and remains higher despite lower end meat prices,” says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “As an example, the wholesale beef ribeye price is $53/cwt. higher (+7.7%) than the same time one year ago. Similarly, the wholesale beef full tender price is $62 higher (+6.4%) than January one year ago. Despite the support provided by middle meats, end meat prices such as the bottom round are $18/cwt. lower (-8.6%) than last year. Despite the struggles in the round and chuck, the brisket and short plate are also providing support to overall value.”

Griffith reminds that beef cutout values—composite values—are calculated by multiplying the prices of individual beef cuts by the percentage of the carcass that comprises them.

 For perspective, Griffith share this breakdown of primals and the percentage of the carcass they represent: rib (11.40%), chuck (29.62%), round (22.32%), loin (21.26%), brisket (4.95%), short plate (7.10%), and flank (3.35%).

Negotiated cash fed cattle trade remained undeveloped through Thursday afternoon.

Spot Feeder Cattle futures pressured the entire cattle complex. Factors included stronger grain prices and the continued erosion in cash calf and feeder cattle prices, tied to weather.

Live Cattle futures closed an average of 65¢ lower.

Feeder Cattle futures closed an average of $1.25 lower (72¢ lower to $2.35 lower in spot Jan).

Corn futures closed 3¢ to 6¢ higher through Sep ’20 and then 1¢ to 2¢ higher.

Soybean futures closed 10¢ to 13¢ higher through Jan ’20 and then mostly 6¢ to 7¢ higher.

Wholesale beef values were firm on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 57¢ higher Thursday afternoon at $212.50/cwt. Select was 70¢ higher at $207.64.

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Major U.S. financial indices closed higher again Thursday, reportedly mostly due to disputed news that the White House might ease tariffs on China during current trade negotiations.

The Dow Jones Industrial Average closed 162 points higher. The S&P 500 closed 19 points higher. The NASDAQ was up 49 points.

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Beef is healthier and more sustainable today than at any point in time, according to a recent study conducted by the USDA’s Agricultural Research Service and The Beef Checkoff, published in the journal Agricultural Systems.

For instance, the study found that data commonly used to depict beef cattle’s environmental impact in the U.S. is often overestimated. The study, which is the most comprehensive beef lifecycle assessment to date, evaluated greenhouse gas emissions, feed consumption, water use and fossil fuel inputs. In all these areas, beef’s environmental impacts were found to be less than previously reported.

Among the findings:

Beef production, including the production of animal feed, is responsible for only 3.3% of greenhouse gas emissions in the U.S.

Per pound of beef carcass weight, cattle only consume 2.6 lbs. of grain, which is similar to pork and poultry.

Corn used to feed beef cattle only represents approximately 9% of harvested corn grain in the U.S., or 8 million acres. By way of contrast, 37.5% of corn acreage in the U.S. is used for producing fuel ethanol.

On average, it takes 308 gallons of water, which is recycled, to produce a pound of boneless beef. In total, water use by beef is only around 5% of U.S. water withdrawals.

“Cattle are natural upcyclers, which means most of what cattle eat can’t be consumed by humans and would otherwise end up in the landfill,” says Sara Place, Ph.D., senior director of sustainable beef production research for the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff. “At the end of the day, cattle generate more protein for the human food supply than would exist without them because their unique digestive system allows them to convert human-inedible plants into high-quality protein.”

Moreover, beef continues to become more sustainable in the U.S. thanks to innovation and production efficiencies. In the U.S. today, the same amount of beef is produced with one-third fewer cattle as compared to the mid-1970s, according to USDA’s National Agricultural Statistics Service. If the rest of the world were as efficient as the U.S., global beef production could double while cutting the global cattle herd by 25%. 

You can find the report—Environmental Footprints of Beef Cattle Production in the United States—HERE.

Negotiated cash fed cattle trade was undeveloped through Wednesday afternoon.

There were 542 head offered in the weekly Fed Cattle Exchange auction, and no takers.

Except for spot Feeder Cattle, Cattle futures ended up little changed, despite a fair bit of pressure for much of the session.

Other than an average of 21¢ lower in the back two contracts, Live Cattle futures closed an average of 25¢ higher.

Except for 97¢ lower in spot Jan and 5¢ lower in Mar, Feeder Cattle futures closed an average of 27¢ higher.

Corn futures closed 1¢ to 2¢ higher.

Except for 1¢ higher in the front three contracts, Soybean futures closed mostly unchanged to fractionally lower.

Wholesale beef values were weak 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 28¢ lower Wednesday afternoon at $211.93/cwt. Select was $1.07 higher at $206.94.

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Major U.S. financial indices closed higher again Wednesday, helped along by strong quarterly earnings from banks, including Goldman Sachs.

The Dow Jones Industrial Average closed 141 points higher. The S&P 500 closed 5 points higher. The NASDAQ was up 10 points.

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The market for alternative proteins—fake meat—is growing but still miniscule.

For instance, in a late 2017 CoBank report, Euromonitor International projected U.S. sales of meat substitutes would rise steadily to $863 million in 2021, about 17% more than estimated sales in 2017. At the time, the retail market size was $49 billion is sales for the U.S. meat and poultry category.

Similarly, a study released by Research and Markets last summer, valued the global meat substitute market size at $4,175 million in 2017, and projected it to reach $7,549 million by 2025

Fake meat products built with plant protein dominate the market currently. Fake meat products cultured from animal cells remain unavailable for a host of reasons, including the lack of regulatory framework.

For perspective, according to NPD research, 14% of U.S. consumers—more than 43 million consumers—regularly use plant-based alternatives such as almond milk, tofu, and veggie burgers, and 86% of these consumers do not consider themselves vegan or vegetarian.

Negotiated cash fed cattle trade was undeveloped through Tuesday afternoon. Last week’s stronger cash trade and another winter storm looming for the Plains and Midwest later this week suggest steady to higher prices.

Those factors supported nearby Live Cattle futures, while lower grain prices boosted Feeder Cattle.

After $1.52 higher in spot Feb, Live Cattle futures closed narrowly mixed (an average of 36¢ lower to an average of 36¢ higher).

Except for 10¢ lower in spot Jan, Feeder Cattle futures closed an average of 45¢ higher.

Grain pressure on Tuesday included, reportedly, more promising weather in South America and the dearth of public data.

Corn futures closed 5¢ to 7¢ lower through Jul ’20 and then mostly 2¢ lower.

Soybean futures closed 9¢ to 10¢ lower through Mar ‘20 and then mostly 4¢ to 7¢ lower.

Wholesale beef values were steady to firm on moderate to fairly good demand and heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 19¢ higher Tuesday afternoon at $212.21/cwt. Select was 41¢ higher at $205.87.

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Major U.S. financial indices closed higher Tuesday, led by tech stocks and supported by early quarterly earnings that were mostly stronger than expected.

The Dow Jones Industrial Average closed 155 points higher. The S&P 500 closed 27 points higher. The NASDAQ was up 117 points.

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“Recent weather may delay fed cattle marketing enough to help support fed cattle prices or push prices higher,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “Whether or not weather impacts are widespread enough to noticeably impact overall market conditions, cattle producers in many areas face significant management headaches due to the weather.”

Peel says the weekend storm dealt heavy snow to some cattle feeding regions in eastern Colorado, Kansas, southeastern Nebraska, southern Iowa and the eastern Corn Belt.

“Feedlots typically post the lowest seasonal average daily gains (ADG) for cattle marketed in March to May, which reflects cattle fed over the previous four to six months. This likely includes the negative impacts of winter weather on feedlot performance but also partly reflects the fact that feedlots place the highest proportion of lightweight cattle (which have lower ADG) in the fall and feed them through the winter,” Peel explains. “Feedlots also experience poorer feeding efficiency in the winter with the highest feed-to-gain ratios of the year posted for cattle marketed in February and March. This occurs despite the fact that lightweight cattle placed in the fall have lower feed-to-gain ratios relative to heavier feedlot placements. This again indicates the impact of winter weather on cattle feeding. Not surprisingly, feedlots post the highest animal morbidity and mortality rates for cattle fed through the winter.”