As expected, slowing beef production ended up hammering fed cattle prices.
Keeping in mind it was a light test, negotiated cash fed cattle trade ended last week steady to sharply lower. Live trades were mostly steady in the Southern Plains at mainly $105/cwt. They were steady to $11 lower in the north at $94-$105 in Nebraska and at $95-$105 in the western Corn Belt. Dressed sales were steady to $18 lower at $155-$165 in Nebraska and at $150-$168 in the western Corn Belt.
Cattle feeders offered 5,778 head in the weekly Fed Cattle Exchange auction held Friday. Just six lots–898 head–sold for a weighted average price of $105/cwt. for delivery at 1-17 days. Except for one lot from Nebraska, all cattle sold came from the Southern Plains.
Even so, cattle futures closed mostly higher Friday, supported by recent stability.
Except for 85¢ and 17¢ lower in the front two contracts, Live Cattle futures closed an average of 95¢ higher (45¢ higher to $1.27 higher).
Except for 22¢ lower in Aug, Feeder Cattle futures closed an average of 68¢ higher.
Wholesale beef values continued higher to end the week.
Choice boxed beef cutout value was $3.12 higher Friday afternoon at $238.99/cwt. Select was $1.22 higher at $227.20.
Corn futures closed mostly 1¢ to 2¢ higher.
Soybean futures closed mostly 2¢ to 3¢ lower.
Major U.S. financial indices closed higher Friday, supported by continued indications at least part of the economy might be on the cusp of reopening.
“Our experts say the curve has flattened and the peak in new cases is behind us. Nationwide, more than 850 counties, or nearly 30% of our country, have reported no new cases in the last seven days,” said President Donald Trump, in a Thursday evening press briefing. “…my administration is issuing new federal guidelines that will allow governors to take a phased and deliberate approach to reopening their individual states.”
The Dow Jones Industrial Average closed 704 points higher. The S&P 500 closed 75 points higher. The NASDAQ closed 117 points higher.
U.S. restaurant customer transactions declined by 41% the week ending Apr. 5, compared to a year earlier, according to The NPD Group (NPD). That follows a decline of 42% the previous week.
“The 41% decline in restaurant transactions is similar to last week and may indicate a bottom. We also need to be aware that further erosion could occur if consumers’ economic situations worsen,” says David Portalatin, NPD food industry advisor. “To date, many consumers have continued to buy restaurant meals through delivery, takeout, and drive-thru to the degree allowed by the restrictive environment; but with rising unemployment, payroll reductions, and temporary furloughs, consumers may begin to think differently about their food budgets overall.”
More specifically, quick service restaurant transaction declines were 38% for the week ending Apr. 5, according to NPD’s CREST® Performance Alerts, which provides a rapid weekly view of chain-specific transactions and share trends for 70 quick service, fast casual, midscale, and casual dining chains.
Customer transactions at full service restaurants–already challenged prior to COVID-19–were down 79%.
A new USDA program–the Coronavirus Food Assistance Program (CFAP)–will provide $16 billion in immediate, direct support to farmers and ranchers, where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
That’s according to U.S. Agriculture Secretary Sonny Perdue, in a late Friday afternoon announcement
“During this time of national crisis, President Trump and USDA are standing with our farmers, ranchers, and all citizens to make sure they are taken care of,” explained Secretary Perdue, when making the announcement. “The American food supply chain had to adapt, and it remains safe, secure, and strong, and we all know that starts with America’s farmers and ranchers.”
For what it’s worth, between the announcement and a press briefing late Friday evening, I was unable to figure out if portions of the $16 billion are part of the previously announced $9.5 billion allocated for direct support to farmers and ranchers in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Either way, Secretary Perdue emphasized this was not an end to COVID-19 assistance from USDA. He said USDA will make the money available as quickly and efficiently as possible, but not how, exactly. Details will be forthcoming no doubt.
CFAP also includes $3 billion, in addition to the $16 billion, to purchase fresh produce, dairy, and meat. USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to make the purchases. USDA will begin with procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith based organizations, and other non-profits serving Americans in need.