Cattle Current Daily—Dec. 15, 2021

Cattle Current Daily—Dec. 15, 2021

As the week wears on, cash fed cattle price prospects appear steady to softer, given reduced packer production the next two holiday weeks, along with declining wholesale beef prices.

Negotiated cash fed cattle trade ranged from limited on light demand to mostly inactive on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few live trades in Kansas at $138/cwt., but too few to trend.

Live prices last week were at $138-$140/cwt. in the Southern Plains and Colorado; $138-$140 in Nebraska and the western Corn Belt. Dressed prices were $220 in Nebraska and $218-$220 in the western Corn Belt.

At the same time, wholesale beef prices continue to decline with Choice boxed beef cutout value $2.50 lower Tuesday afternoon at $260.72/cwt. Select was  $4.84 lower at $248.80.

All of that was enough for Live Cattle futures to drift an average of 32¢ lower.

Feeder Cattle futures closed an average of 41¢ lower Tuesday, also pressured by Corn futures closing 2¢ to 5¢ higher, while Soybean futures closed 11¢ to 13¢ higher through Sep ’23 and then mostly 9¢ higher — both rebounding from the previous day’s losses.

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Major U.S. financial indices closed lower Tuesday, pressured in part by a higher Producer Price Index (PPI) than anticipated. The final demand PPI was 0.8% higher month to month in November. It was 9.6% higher during the previous 12 months ending in November — the steepest increase since 12-month data were first calculated in November 2010, according to the U.S. Bureau of Labor Statistics (BLS).

“The Producer Price Index is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services,” according to BLS. “PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), which measure price change from the purchaser’s perspective.”

The Dow Jones Industrial Average closed 106 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 175 points.

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The latest monthly Meat Demand Monitor (MDM) points toward continued domestic beef demand strength. 

“Responses in November again suggest consumer expectations of price increases (beef and pork). These consumer expectations and realized prices continue to align with broader discussions around food (and non-food) inflation,” according to the MDM report. “It should be carefully noted these higher expected prices reflect both supply-side factors (e.g. higher production costs) and demand strength…It should further be noted the majority (83%) indicate having either the same, or

more than normal amounts of meat on hand, indicating both ongoing demand strength and supply availability.”

The MDM — funded in part by the National Beef Checkoff and the National Pork Checkoff — tracks U.S. consumer preferences, views, and demand for meat with separate analysis for retail and food service channels. More than 2,000 respondents are surveyed, reflecting the national population.

Beef market share at the grocery store was 32% in November, according to the MDM. It was 21% for pork. For restaurants, market share was 41% for beef and 15% for pork.

“Taste, Freshness, Safety, and Price remain most important when purchasing protein. Price decreased most in importance from last month following its increase in October,” according to the report.

The MDM also asks consumers various ad hoc questions each month. In November, 75% of respondents self-declared as regular consumers of products derived from animal products — the highest percentage since the data series began in 2020. As for other categories, 11% of respondents indicated they are Flexitarian/Semi-Vegetarian; 9% indicated they are either Vegan Vegetarian or Vegetarian.

The MDM is coordinated and published by Kansas State University.

2021-12-14T21:52:44-06:00

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