Tighter fed cattle supplies, compounded by weather-reduced tonnage kept the hammer down on negotiated cash fed cattle prices Thursday. Trade ranged from moderate with good demand in Nebraska to mostly inactive on light demand through Thursday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are $5 higher in the Southern Plains at $175/cwt., $7-$8 higher in Nebraska at $182-$184 and $7 higher in the western Corn Belt at $181-$184. Dressed prices are $5-$10 higher at $290.
Choice boxed beef cutout value was $1.94 higher Thursday afternoon at $300.42/cwt. Select was $1.57 higher at $283.38/cwt.
Cattle futures mostly edged lower Thursday with likely repositioning amid the strong rally.
Feeder Cattle futures closed an average of 50¢ lower, except for 5¢ and 45¢ higher in two contracts.
Live Cattle futures closed an average of 58¢ lower, except for $1.22 higher in spot Apr.
Corn futures closed fractionally lower to 3¢ lower.
KC HRW Wheat closed mostly 12¢ to 18¢ lower.
Soybean futures closed mostly 3¢ to 5¢ higher.
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Major U.S. financial indices closed higher Thursday with a another closely watched inflation gauge lower than expected.
The Producer Price Index for final demand declined 0.5% in March, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Final demand prices were unchanged in
February and increased 0.4% in January. On an unadjusted basis, the index for final demand advanced 2.7% for the 12 months ended in March.
The Dow Jones Industrial Average closed 383 points higher. The S&P 500 closed 54 points higher. The NASDAQ was up 236 points.
West Texas Intermediate Crude Oil futures (CME) closed 74¢ to $1.10 lower through the front six contracts.
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All things being equal, analysts with the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) see commodity prices mostly moderating and returning to a more historical semblance of normalcy.
“What goes up, generally comes back down in agricultural markets,” says Pat Westhoff, FAPRI-MU director Pat Westhoff. “Projected prices for most crops, poultry and dairy products all retreat in 2023 from recent peaks, and so do some production expenses…Net farm income is likely to fall back from the record levels of 2022 and consumer food price inflation is also likely to slow in 2023.”
The projections Westhoff refers to come from the recently released FAPRI-MU annual U.S. Baseline Outlook report. The report includes projections for agricultural and biofuel markets and serves as a point of reference for evaluating alternative scenarios for agricultural policy.
Among some of the highlights…
In 2023, most projected livestock sector prices fall as supplies rebound and demand growth slows. The one major exception is cattle, where drought-reduced inventories reduce the number of animals available for slaughter.
If weather conditions allow crop yields to return to trend-line levels in 2023, prices for corn, soybeans, wheat, cotton and many other crops are likely to fall. Over the next 10 years, average nominal crop prices are much lower than they have been in 2022/23, but they remain above the average of 2017/18 to 2021/22.
Consumer food price inflation jumped to 9.9% in 2022 as farm commodity prices rose, labor and other costs increased, supply chain problems continued, and consumer demand was strong. Price increases have slowed in recent months, and the projected annual increase in consumer food prices is 4.4% in 2023 and under 2% in 2024.