Daily Market Highlights

The weekly five-area weighted average steer price last week was $101.34/cwt. on a live basis, which was $2.68 more than the previous week. The average dressed steer price was $163.20, which was $3.17 higher.

Stronger cash fed cattle prices and firmer wholesale beef values helped Cattle futures gain a little ground Monday.

Live Cattle futures closed an average of 67¢ higher.

Feeder Cattle futures closed an average of 32¢ higher (2¢ to 85¢ higher).

Choice boxed beef cutout value was $1.73 higher Monday afternoon at $207.20/cwt. Select was $1.18 higher at $193.93.

Corn futures closed 1¢ to 2¢ higher.            

Soybean futures closed mostly 3¢ to 4¢ higher.

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Major U.S. financial indices closed mixed on Monday, pressured by profit taking in tech stocks, but buoyed by Executive Order from president Trump that would extend some of the recently-ended coronavirus aid to the unemployed.

The Dow Jones Industrial Average closed 357 points higher. The S&P 500 closed 9 points higher. The NASDAQ closed 42 points lower.

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Cattle feeding returns appear to be more promising for the fourth quarter, but plenty of uncertainty remains, according to the Livestock Marketing Information Center (LMIC).

On the up side, LMIC analysts point to lower projected breakeven levels and more optimistic Live Cattle futures for the fourth quarter. LMIC projections for fed cattle prices are in line with the recent futures prices, if not slightly more optimistic for December and into 2020.

In the meantime, LMIC projects cattle feeding returns to continue in the red. The organization estimated losses for cattle marketed in July at about $200 per head, the fifth consecutive month of red ink.

For perspective, LMIC estimates assume feeding out a 750-lb. steer in a commercial Southern Plains feedlot and include all costs of production. The estimates are not survey-based and presume normal weather conditions. Cash prices are used; neither fed cattle prices nor feedstuff costs are hedged. Estimates assume a normal marketing window, based on a standard cost of gain.

“Fed cattle prices in Kansas averaged $95.23/cwt. in July, leaving only $200-$300 to cover variable costs during the feeding timeframe per animal,” explain LMIC analysts. “For most feedlots, regardless of feeding 120 days or 180 days, it was not enough to cover costs. KSU feedlot data suggests that the cost of gain was about $500 per head in May to feed a steer to slaughter weight…September marketed cattle face a lower breakeven, which in early August indicated a net return very close to $0 per head.”

With expected lower feed costs, fed cattle prices remain the primary risk, according to LMIC.

Negotiated cash fed cattle trade for the week was mainly $3 higher through Friday afternoon at $103/cwt. on a live basis and at $163 in the beef.

Through Thursday, the five-area direct weighted average steer price was $101.28 on a live basis, which was $2.79 higher than the previous week. The average dressed steer price was $163.19, which was $3.17 higher than the prior week. Compared to the same time last year, though, those prices were $12.83 less and $19.38 less, respectively.

Cattle futures edged lower on Friday, entrenched in the long-worn sideways channel, and with some likely profit taking.

Except for 17¢ higher in spot Aug, Live Cattle futures closed an average of 51¢ lower (7¢ to 87¢ lower).

Except for 22¢ and 7¢ higher in two away contracts, Feeder Cattle futures closed an average of 37¢ lower.

Choice boxed beef cutout value was 81¢ higher Friday afternoon at $205.47/cwt. Select was 74¢ higher at $192.75.

Corn futures closed mostly 2¢ lower. 

Soybean futures closed mostly 9¢ to 10¢ lower.

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Major U.S. financial indices closed mainly sideways on Friday as investors weighed the impasse over additional federal coronavirus aid against stouter employment numbers than expected.

Total non-farm employment increased 1.8 million month-to-month in July and the national unemployment rate declined 0.9% to 10.2%, according to the U.S. Bureau of Labor Statistics.

Average hourly earnings for all employees on private non-farm payrolls rose by 7¢ to $29.39.

The Dow Jones Industrial Average closed 46 points higher. The S&P 500 closed 2 points higher. The NASDAQ closed 97 points lower.

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Recently expired COVID-19 unemployment benefits could hamstring the struggling recovery in the U.S. restaurant sector, according to the NPD Group (NPD).

“Up until July 31, somewhere between 25 and 30 million Americans were receiving Federal Pandemic Unemployment Compensation as part of the federal government’s CARES Act, which has provided $600 a week of enhanced unemployment benefits,” explains David Portalatin, NPD food industry advisor. “These unemployment benefits translated to between $15-$18 billion per week being put into consumers’ bank accounts, and for context, total restaurant industry sales right now are a bit less than $8 billion per week.”

For the week ending July 26, U.S. major restaurant chain customer transactions were down 11%, compared to a year earlier, but 1% more positive than the previous week, according to NPD’s CREST^®Performance Alerts.

Customer transactions at major quick service restaurant chains were even with the prior week and down 11% year over year. Full service restaurants chain transactions were 24% less than the same week last year, but improved 3% week to week.

The NPD folks note that full service restaurants were still recovering from the Great Recession, which ended more than 10 years ago, when the COVID pandemic prompted shelter-at-home orders and mandated dine-in closures. Along the way, consumers began leaning more toward quick service restaurants, too.

“Long before COVID, consumers were already favoring quick service restaurants and off-premises dining, and this trend has accelerated during the pandemic and will most likely be a behavior that will stick,” Portalatin says. “For full service restaurants it will mean more flexible operations, delivering on the on-premises experience and optimizing off-premises services. I see this as a sea change for the U.S. restaurant industry.”

Negotiated cash fed cattle trade had yet to fully develop through Thursday afternoon, according to the Agricultural Marketing Service, but early prices are mostly $3 higher, with established trade in the Southern Plains at mostly $100/cwt. Although too few to trend, there were some early trades in Nebraska ($163 dressed) and in the western Corn Belt at $103 on a live basis and at $163 in the beef.

Cattle futures were mixed but mostly softer. The latest U.S. Export sales report offered no support. Net beef export sales for the week ending July 30 were down 55% from the previous week and down 35% percent from the prior four-week average, according to USDA’s Foreign Agricultural Service. June exports were down hard (see below).

Except for 32¢ and 42¢ higher on either end of the board, Live Cattle futures closed an average of 45¢ lower.

Except for 15¢ lower in Sep, Feeder Cattle futures closed an average of 87¢ lower (52¢ to $1.32 lower).

Choice boxed beef cutout value was $1.09 higher Thursday afternoon at $204.66/cwt. Select was $1.19 higher at $192.01.

The average dressed steer weight for the week ending July 25 was 903 lbs., which was 4 lbs. heavier than the previous week and 34 lbs. heavier than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as the previous week but 29 lbs. heavier than the previous year.

Total cattle slaughter for the week of 639,971 head was 11,692 head fewer than the same week last year, but beef production of 533.7 million lbs. was 7.8 million lbs. more.

Corn futures closed unchanged to fractionally mixed. 

Soybean futures closed mostly fractionally lower to 1¢ lower.

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Major U.S. financial indices closed higher Thursday, led by tech stocks and supported by fewer weekly initial jobless claims than anticipated.

Initial claims for the week of Aug. 1 were 249,000 fewer than the prior week at 1.19 million, according to the U.S. Department of Labor.

The Dow Jones Industrial Average closed 185 points higher. The S&P 500 closed 21 points higher. The NASDAQ closed 109 points higher.

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Supply disruptions, restrictions on foodservice and weakening economies in major import markets helped confound U.S. beef exports in June, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

June beef exports were close to the May lows, down 33% from a year ago to 79,013 metric tons (mt), with value falling 32% to $492.3 million. Exports were below year-ago levels to most markets but trended higher to Canada, China and South Africa. For January through June, beef exports fell 9% below last year’s pace in volume (591,609 mt) and were 10% lower in value ($3.63 billion).

Beef export value per head of fed slaughter averaged $219.53 in June, down 32% year over year. The first-half average was $300.43 per head, down 4%.

“We expected that the interruptions in red meat production would continue to weigh on June exports, but anticipated more of a rebound from the low May totals, particularly for beef,” says USMEF President and CEO Dan Halstrom. “But, it takes time for the entire chain to adjust to supply shocks, and thus it was another difficult month for exports. However, weekly U.S. export data suggest an upward trend in demand in most markets, and with production recovering, the U.S. has regained its supply advantage. So, we expect beef and pork exports to regain momentum in the second half of the year.”

June pork exports totaled 207,181 mt, which were 3% less than a year ago, while export value fell 9% to $516.3 million. Exports continued to trend higher than a year ago to China/Hong Kong, but were the lowest since October.

There was no negotiated cash fed cattle trade summary available from USDA at press time Wednesday, but indications continued to point to higher prices for the week.

For instance, Choice steers and heifers sold $3.50 to $3.75 higher at the fat auction in Tama, Iowa. There were 127 head of Choice 2-4 steers weighing an average of 1,382 lbs. and bringing an average of $104.32/cwt.

Cattle feeders offered 1,474 head in the weekly Fed Cattle Exchange Auction—all from the Southern Plains. Of those, 1,400 head sold: 960 head for delivery of 1-9 days at an average weighted price of $99.95/cwt.; 440 head for delivery at 1-17 days for a weighted average price of $100.

Except for 2¢ and 5¢ lower in two contracts, Live Cattle futures closed an average of 34¢ higher.

Except for 15¢ lower in Sep, Feeder Cattle futures closed an average of 59¢ higher.

Choice boxed beef cutout value was 58¢ lower Wednesday morning at $203.66/cwt. Select was 56¢ higher at $191.01.

Corn futures closed 1¢ to 3¢ higher. 

Soybean futures closed 1¢ to 3¢ lower through Mar ’21 and then mostly 1¢ higher.

The five-area direct weighted monthly average fed steer price in July was $96.57/cwt. on a live basis, which was $7.25 less than in June and $15.63 less than the previous July. The average dressed steer price of $157.69 was $8 less than the previous month and $20.54 less than the prior year.

The average monthly fed heifer price of $96.22 was $9.24 less than in June and $15.88 less than in July of last year. The average heifer price in the beef was $157.32, which was $8.70 less month to month and $20.91 less year over year.

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Major U.S. financial indices closed higher Wednesday, amid mixed economic news. Support included more promise for another COVID-19 vaccine candidate and ongoing Congressional wrestling for more pandemic aid. Pressure included a more pessimistic labor outlook.

Private sector employment increased by 167,000 jobs from June to July according to the closely watched ADP National Employment Report®.  That was significantly less than traders expected.

The Dow Jones Industrial Average closed 373 points higher. The S&P 500 closed 21 points higher. The NASDAQ closed 57 points higher.

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Heading into Labor Day–the last grilling holiday of the summer–David Anderson, Extension livestock economist at Texas A&M University says the recent surge in orders suggests retailers are making a push to feature beef.

“Big beef featuring will be welcome,” Anderson says, in the latest issue of In the Cattle Markets. “Slowly working off the backlog (fed cattle) and moving more beef into retail is slowly pulling cattle prices higher. The weekly Choice beef cutout hit its low for the year, so far, at $201.24/cwt. for the week ending July 18. Since then, it has clawed back to $202.34. But, as with fed cattle, large beef supplies are keeping the pressure on the wholesale market.”

Although the aforementioned backlog continues, Anderson notes fed cattle slaughter is almost equal to year-ago levels. Specifically, he says fed cattle slaughter for June and July, combined, was 99.9% of a year earlier. He adds that along with increased cow slaughter and heavier carcass weights beef production for the last eight weeks was more than the same time period last year.

“In coming weeks, watch for progress on the fed cattle slaughter front, more featuring for Labor Day and increasing beef exports as prices decline. All of these should act to boost fed cattle prices going into late summer,” Anderson says.

Cattle futures closed mostly narrowly lower on Tuesday, awaiting cash direction. Early indications are cash fed cattle have some room to grow this week.

Live Cattle futures closed an average of 35¢ lower.

Except for an average of 14¢ higher in two mid-board contracts, Feeder Cattle futures closed an average of 22¢ lower.

Choice boxed beef cutout value was 42¢ lower Tuesday afternoon at $204.24/cwt. Select was 5¢ higher at $190.45.

Positive crop conditions and weather weighed on grain futures, Tuesday.

Corn futures closed 6¢ to 9¢ lower through Jly ’21 and then mostly 1¢ lower.

Soybean futures closed 11¢ to 14¢ lower through Mar ’21 and then 4¢ to 9¢ lower

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Major U.S. financial indices closed higher Tuesday, with increasing hopes of Congress agreeing to additional coronavirus relief.

The Dow Jones Industrial Average closed 164 points higher. The S&P 500 closed 11 points higher. The NASDAQ closed 38 points higher.

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Month-to-month farmer sentiment was virtually unchanged in July, according to the Purdue University/CME Group Ag Economy Barometer. The index increased 1 point to a reading of 118, which was 30% lower than in February before the pandemic began.

Producers’ perspective on current versus future conditions shifted, though. The Index of Current Conditions rose 12 points from June to a reading of 111, and the Index of Future Expectations fell 5 points to a reading of 121.

“Although overall farmer sentiment in July did not change much compared to June, sentiment was still much weaker than in February before the impact of coronavirus hit,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “In July, farmers indicated they were a bit less concerned about the current economic situation on their farms than earlier this spring, but they are less optimistic about the future, perhaps as a result of the recent resurgence in COVID-19 cases. Still, two-thirds of producers responding to this month’s survey said they believe Congress should provide additional economic assistance to farmers in 2020 to help offset the pandemic’s impact on agriculture.”

Among survey highlights:

**56% of producers said they plan to reduce their farm machinery purchases compared with a year ago; while 38% said they plan to keep machinery purchases about the same.

**16% of respondents expect farmland values to rise over the next 12 months compared with 10% in June. Looking ahead, however, 48% said they expect values to rise over the next five years compared with 55% in the previous survey.

**More than half of survey respondents said they were less likely to attend in-person educational events in 2020, as a result of COVID-19 concerns. When asked what their top information source would be in lieu of attending in-person events, 36% chose farm magazines, 19% chose online webinars, 17% chose farm radio and 17% chose websites.

The Ag Economy Barometer, based on responses from 400 U.S. agricultural producers, was conducted July 20-24.

Last week’s five-area direct weighted average steer price was $98.66/cwt. on a live basis, which was $1.42 more than the previous week. The average dressed steer price was $160.03, which was $1.93 more than the prior week.

Cattle futures continued to maintain and extend recent gains Monday, except for the back months of Feeder Cattle. Support includes cash strength, thoughts of increased food service demand when schools resume this fall and the highest level of open interest since the middle of March.

Live Cattle futures closed an average of 42¢ higher.

Feeder Cattle futures closed mixed, from an average of 47¢ higher across the front half of the board to an average of 65¢ lower across the back half.

Choice boxed beef cutout value was $1.40 higher Monday afternoon at $204.66/cwt. Select was 51¢ higher at $190.40.

Corn futures closed 1¢ to 2¢ higher through Jly ’21 and then mostly fractionally higher.

Soybean futures closed 1¢ to 3¢ higher.

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Major U.S. financial indices closed higher Monday, fueled by the continued rally in big tech stocks, as well as positive manufacturing news.

Economic activity in the manufacturing sector grew in July, with the overall economy notching a third consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

Specifically, the July PMI® rose 1.6 percentage points month to month in July to 54.2%. 

The Dow Jones Industrial Average closed 236 points higher. The S&P 500 closed 23 points higher. The NASDAQ closed 157 points higher.

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“Beef supply conditions have stabilized, albeit at higher levels of production year over year in the second half of 2020. Beef demand will be critical in determining overall beef prices and, subsequently, cattle prices going forward,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. 

As for any product, Peel explains beef demand is generally a function of consumers’ willingness and ability to purchase specific quantities of the product at various price levels.

Consumer ability to purchase a product is related to the level of consumers’ discretionary income. Generally, Peel says macroeconomic conditions, including overall GDP levels, along with unemployment, are indicative of income levels. 

The advance estimate for U.S. real GDP in the second quarter was a staggering -32.9%, according to the U.S. Bureau of Economic Analysis. The nation’s unemployment rate in June was 11.1%.

“This highlights questions about the impact of the pandemic on beef demand in the first half of the year and, more importantly, beef demand for the remainder of the year,” Peel says.

Ability aside, Peel explains consumer willingness to purchase beef has to do with underlying preferences, which tend to be relatively stable, evolving over long periods of time.

“In the short run, willingness to purchase beef will depend on the relative prices of other products, particularly substitute products that may be consumed in place of a particular product,” Peel says. “For specific beef products, this is a complicated consideration, including other proteins such as pork and poultry, as well as the multitude of other beef products that may be chosen by consumers. In periods of low income, beef consumers may trade down from high cost beef products to lower valued products. Food service demand, which remains diminished, will emphasize this impact going forward.”

Negotiated cash fed cattle prices ended the week generally $1-$2 higher on a live basis at $97/cwt. in the Southern Plains, $100 in Nebraska, $98 in Colorado and steady at $101-$102 in the western Corn Belt. Dressed prices were $2 higher at $160.

Through Thursday, the average five-area direct weighted steer prices was $98.49/cwt. on a live basis, which was $1.26 more than the previous week, but $15.48 less than the same time last year. The average dressed steer price of $160.02 was $1.92 higher than the previous week, but $24.49 less than the previous year.

Cattle futures closed higher again Friday, helped along by cash strength, as well as week-end and month-end positioning and book squaring.

Live Cattle futures closed an average of $1.01 higher.

Feeder Cattle futures closed an average of $1.63 higher.

Choice boxed beef cutout value was $1.46 higher Friday afternoon at $203.26/cwt. Select was $1.61 lower at $189.89.

Corn futures closed mostly fractionally higher. 

Soybean futures closed 2¢ to 4¢ higher.

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Major U.S. financial indices closed higher Friday, at the end of a volatile session, but supported by bullish quarterly earnings posted by big tech stocks.

The Dow Jones Industrial Average closed 114 points higher. The S&P 500 closed 24 points higher. The NASDAQ closed 157 points higher.

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“Federally inspected beef production has been above year-ago levels since the second week of June, while federally inspected cattle slaughter is down nearly 70,000 head over the same timeframe, compared to last year,” explains Andrew P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “The increase in beef production stems from heavier cattle that spent more days on feed than was anticipated.”

The average dressed steer weight the week ending July 18 of 899 lbs. was 3 lbs. less than the prior week but 33 lbs. more than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as a week earlier but 34 lbs. heavier than the prior year.

At the same time, the percentage of fed cattle grading Choice and Prime continues to grow, relative to the same time last year.

Griffith notes only 0.7% more cattle graded Choice through the first 23 weeks of this year, compared to the same time in 2019. But, 2.4% more graded Choice year over year during the past six weeks.

More broadly, according to weekly USDA National Steer and Heifer Estimated Grading Percent reports, from the week ending May 2 through the week ending July 18, 70.60% to 73.58% graded Choice each week, compared to 69.59% to 71.63% for the same weeks last year.

For the same period of time this year, carcasses grading Choice and Prime ranged from 81.89% to 84.34% each week, compared to 77.11% to 78.82% last year.

“This year-over-year increase is likely to continue through the end of the year, which means more Choice beef on the market. This may keep the Choice-Select spread in check the next several months compared to last year’s wide spread,” Griffith says.

So far for the week, negotiated cash fed cattle prices on a live basis are $1 higher in the Southern Plains at $97/cwt., $2 higher in Nebraska at $100, steady in Colorado at $98 and steady to $2 higher in the western Corn Belt at $100-$102. Dressed prices are $2 higher at $160.

Cattle futures closed higher again Thursday. Along with cash strength, support included bullish export news with net sales of 29,500 metric tons (mt) for the week of July 23—a market year high—up 89% from the previous week and up 81% from the previous four-week average. That according to the U.S. Export Sales report from USDA’s Foreign Agricultural Service.

Except for 15¢ lower in away Oct, Live Cattle futures closed an average of 41¢ higher.

Feeder Cattle futures closed an average of $1.05 higher (67¢ higher at the back to $1.85 higher toward the front).

Choice boxed beef cutout value was 69¢ higher Thursday afternoon at $201.80/cwt. Select was $2.01 higher at $191.50.

The average dressed steer weight the week ending July 18 of 899 lbs. was 3 lbs. less than the prior week but 33 lbs. more than the same week a year earlier, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 829 lbs. was the same as a week earlier but 34 lbs. heavier than the prior year.

Corn futures closed mostly fractionally higher. 

Soybean futures closed mostly 1¢ to 2¢ higher.

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Except for the tech sector, major U.S. financial indices closed lower Thursday, pressured by the expected but historic decline in second-quarter GDP.

Real gross domestic product decreased at an annual rate of 32.9% in the second quarter, according to the advance estimate released by the Bureau of Economic Analysis. Real GDP in the first quarter decreased 5%.

The Dow Jones Industrial Average closed 225 points lower. The S&P 500 closed 12 points lower. The NASDAQ closed 44 points higher.

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Potentially, the heated debate and hectic work related to enhancing price discovery in cash fed cattle markets reached a crossroads this week.

The National Cattlemen’s Beef Association’s (NCBA) Live Cattle Marketing Committee and the NCBA Board of Directors unanimously passed policy that supports voluntary efforts to improve cash fed cattle trade during the next 90 days, with the potential for mandates in the future if robust regional cash trade numbers are not reached by the industry.

Specifically, according to the organization’s resolution:

“NCBA supports a voluntary approach that:

“1) Increases frequent and transparent negotiated trade to regionally sufficient level, to achieve robust price discovery determined by NCBA funded and directed research in all major cattle feeding regions, and

“2) Includes triggers to be determined by a working group of NCBA producer leaders by October 1, 2020. 

“BE IT FURTHER RESOLVED, if the voluntary approach does not achieve robust price discovery as determined by NCBA funded and directed research, and meet the established triggers that increase frequent and transparent negotiated trade to a regionally sufficient level, and triggers are activated, NCBA will pursue a legislative or regulatory solution determined by the membership.

“BE IT FURTHER RESOLVED, NCBA support a three-year review/sunset provision on any negotiated trade solutions implemented to allow for a thorough cost benefit analysis to be conducted.”

That came after intense debate and more than six hours of wrangling, not to mention the years of effort leading up to it, including the research referenced in the resolution.

As an aside, depending on cash trade levels deemed sufficient in each region, there are a number of ways to achieve a deeper pool of cash fed cattle trade data, everything from changing the approach to confidentiality in livestock mandatory reporting (up for reauthorization in September), to bid-the-grid base prices, to a number of other voluntary options mentioned in the recent USDA Boxed Beef & Fed Cattle Price Spread Investigation Report. Stephen Koontz, agricultural economist at Colorado State University previously outlined many of those options in his ongoing research.

“The policy we passed today is the result of every state cattlemen’s association coming together to work through their differences and finding solutions that meet the needs of their members, all of whom agree that our industry needs more robust price discovery,” says  NCBA President Marty Smith. “This policy provides all players in the industry the opportunity to achieve that goal without seeking government mandates.”

The Live Cattle Marketing Committee considered several proposals, each aimed at encouraging greater volumes of cash cattle trade.

Negotiated cash fed cattle trade was $1 higher in the Southern Plains Wednesday at $97/cwt., according to the Agricultural Marketing Service. Although too few to trend, there were also some live sales in Nebraska at $98 and in the western Corn Belt at $99-$101. Early dressed sales were at $160.

Slaughter steers and heifers also sold steady to $1 higher at Sioux Falls Regional in South Dakota, where 184 head of Choice 2-3 steers weighed an average of 1,475 lbs. and brought an average price of $101.12.

Cash strength helped Cattle futures extend gains Wednesday.

Except for 2¢ lower in the back contract, Live Cattle futures closed an average of 77¢ higher (47¢ to $1.07 higher).

Feeder Cattle futures closed an average of 98¢ higher (25¢ to $1.47 higher), amid extremely light trade.

Wholesale beef prices continue to drag bottom, though. Choice boxed beef cutout value was $1.85 lower Wednesday afternoon at $201.11/cwt. Select was $1.17 higher at $189.49.

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

Soybean futures closed fractionally lower to 5¢ lower though May ’21 and then mostly 1¢ to 3¢ higher.

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Major U.S. financial indices closed higher Wednesday. Besides tech stocks bouncing higher, support included the Federal Reserve leaving interest rates unchanged, as expected.

“Weaker demand and significantly lower oil prices are holding down consumer price inflation. Overall financial conditions have improved in recent months, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses,” according to a statement from the Fed. “The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”

The Dow Jones Industrial Average closed 160 points higher. The S&P 500 closed 40 points higher. The NASDAQ closed 140 points higher.

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“We want beef to be the protein of choice, and we want the entire U.S. beef industry to be trusted and respected for its commitment to quality, safety, and sustainability,” says Kim Brackett, an Idaho rancher and leader of the Beef Industry Long Range Plan (BILRP) taskforce.

That group unveiled its plan for 2021-2025 at this week’s National Cattlemen’s Beef Association (NCBA) Cattle Industry Summer Business Meeting in Denver. The BILRP—updated every five years since 1995—is a designed to help the beef industry establish a common set of objectives and priorities. It communicates the industry’s strategic direction and provides insight to how the industry can serve its stakeholders by growing beef demand.

“The task force invested many hours, discussing the current state of the industry and what we need to accomplish over the next five years. We feel we’ve established some important priorities and strategies, as well as benchmarks for success that will help keep our industry on track through 2025 and beyond,” Brackett says.

The 2021-2025 Beef Industry Long Range Plan includes the following industry objectives:

1. Grow global demand for U.S. beef by promoting beef’s health and nutritional benefits, satisfying flavor and unparalleled safety.
2. Improve industry-wide profitability by expanding processing capacity and developing improved value-capture models.
3. Intensify efforts in researching, improving, and communicating U.S. beef industry sustainability.
4. Make traceability a reality in the U.S. beef industry.

Core strategies and goals to achieve those objectives include:

(core strategy in bold type; sample of goals in italics)

Drive growth in beef exports. 

*Grow U.S. beef exports to 17% of U.S. beef production by 2025.

*By 2025, 75% of all cattle producing states are participating in a nationwide animal disease traceability program (e.g. U.S. Cattle Trace).

Grow consumer trust in beef production.

*Grow BQA certifications by a cumulative total of 10% per year and achieve national standardization of the BQA program by 2023.

Develop and implement better business models to improve price discovery and value distribution across all segments.

*Maintain a beef cowherd of 30-31 million with a growth target of 32.0 to 32.5 million head.

*Grow packing capacity by 7% (7,000 head per day) by 2025.

Promote and capitalize on the multiple advantages of beef.

*By 2025, achieve a Wholesale Beef Demand Index of 124.

Improve the business and political climate for beef.

*By 2025, at least 75% of producers will agree that the beef industry is effectively addressing opportunities and challenges in a way that enhances the business climate for beef.

Safeguard and cultivate investment in beef industry research, marketing and innovation.

*Quantify the existing public research funding for beef industry production issues and grow that funding by 25% by 2025.

*Increase national industry program funding for beef marketing, research and promotion efforts to $100 million by 2025.

Although too few transactions to trend, there was some early negotiated cash fed cattle trade Tuesday. Live prices in the Southern Plains were on either side of steady at $95/cwt. in the Texas Panhandle and $95.00-$97.50 in Kansas, according to the Agricultural Marketing Service. Early dressed sales in the western Corn Belt were at $161, compared to $158 last week.

Cattle futures closed higher Tuesday, off of session highs and square in the same trading channel of recent weeks.

Live Cattle futures closed an average of 48¢ higher (22¢ to $1.17 higher).

Feeder Cattle futures closed an average of 78¢ higher (15¢ to $1.67 higher).

Choice boxed beef cutout value was 41¢ higher Tuesday afternoon at $202.96/cwt. Select was $1.81 lower at $188.32.

Corn futures closed mostly 3¢ to 4¢ lower.

Soybean futures closed 8¢ to 12¢ lower.

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Major U.S. financial indices closed lower Tuesday. Pressure included some likely profit taking in tech stocks and uncertainty about how quickly lawmakers will come to terms on another round of federal economic aid to address COVID-19.

The Dow Jones Industrial Average closed 205 points lower. The S&P 500 closed 20 points lower. The NASDAQ closed 134 points lower.

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Surging COVID cases across the nation and subsequent rollbacks in re-opening plans are stalling the U.S. restaurant industry’s recovery, according to The NPD Group. Since the second week of June, declines in major restaurant chain customer transactions range from 11% to 14% less than a year earlier. Until then, declines improved steadily for about six weeks.

“I believe there is still a lot of upside recovery for restaurants, but for now we’re stuck in neutral until we can get the industry operating at full capacity,” says David Portalatin, NPD food industry advisor. “The recovery phase will then tell us whether the industry can recapture enough customer traffic to get back to the pre-COVID baseline, or whether the new normal will reflect a re-set where consumers prepare more meals in their home kitchens for a longer term.”

Major restaurant chain total customer transactions were 12% less year over year for the week ending July 19, which was 2% more positive than the prior week, according to NPD’s CREST® Performance Alerts.

That same week, 78% of restaurants were in geographies permitting on-premises dining with varying capacity restrictions. For instance, 13% of the nation’s restaurant units are in California, where on-premise dining is prohibited.

Moreover, many restaurants continue to operate at capacities that are significantly less than normal in terms of menu offerings and store hours. Restaurant operators make those decisions based partly on the pandemic situation overall and partly on the difficulty in attracting labor.

Quick service restaurant chains (QSR) were responsible for improving customer transaction declines for the week ending July 19. QSR transactions were 11% less compared to the prior year. Full service restaurant (FSR) chain transactions were down 27%. According to NDP, FSR transactions would be worse without a significant shift to off-premises. In June, FSR off-premises traffic increased 91% versus year ago, while on-premises traffic declined 62%.

“Certainly full service restaurants need to recover their lost on-premises business since that will always be their main source of volume,” says Portalatin. “But, I wouldn’t be surprised to see new casual dining models emerge that are designed to optimize off-premises capabilities for the long-term.”