Cattle Current Daily—Feb. 4, 2021

Cattle Current Daily—Feb. 4, 2021

Negotiated cash fed cattle trade was at a standstill in Kansas and Nebraska through Wednesday afternoon, according to the Agricultural Marketing Service. Elsewhere, trade was mostly inactive on very light demand.

Cattle feeders offered 1,362 head (eight lots) in Central Stockyard’s weekly Fed Cattle Exchange Auction, all from the Southern Plains. Of those, 699 head sold (four lots of heifers) for a weighted average price of $113.71/cwt., via live weight and Bid-the-Grid. That was a bit higher than country trade in the region last week.

At Sioux Falls Regional fat auction, though, slaughter steers and heifers sold steady to $2 lower. There were 436 head of Choice 3-4 steers weighing an average of 1,554 lbs. bringing an average of $110.66/cwt. That was at the low end of the last week’s country price.

Cattle futures closed narrowly mixed, but mostly edged higher after the front months on Wednesday. Pressure included resurgent grain futures prices and softer wholesale beef values.

Live Cattle futures closed an average of 38¢ higher, except for an average of 28¢ lower in the front two contracts.

Feeder Cattle futures closed an average of 29¢ higher, except for an average of 36¢ lower in the front three contracts.

Choice boxed beef cutout value was $1.48 lower Wednesday afternoon at $235.28/cwt. Select was $1.65 lower at $223.39.

Corn futures closed 4¢ to 9¢ higher through May ‘22 and then mostly unchanged to fractionally lower.

Soybean futures closed 9¢ to 16¢ higher through Sep ‘21, and then mostly 1¢ to 4¢ higher.

******************************

Major U.S. financial indices closed little changed Wednesday.

The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closedp 3 points higher. The NASDAQ was up 2 points.

******************************

Fundamentally speaking, numbers are beginning to shift back into the producer’s favor. Last year’s cattle prices should be the lowest for several years.

“The number of steers and heifers going through our packing plants over the course of the next several years is going to shrink. As it declines, so will our beef production, and prices are going to get higher. We’ll see a transition to a higher trending, more profitable cow-calf operator, feedstock operator and cattle feeder,” said Randy Blach, CattleFax CEO, at last week’s annual International Livestock Forum hosted by Colorado State University and the National Western Stock Show

Blach used fed cattle slaughter capacity utilization to illustrate how leverage should swing back toward producers. It ranged from 102% in 2016 to 110% last year as cattle numbers ran ahead of hook space. As fed cattle supplies decline, capacity utilization will drift back toward 100%, mostly after this year.

At the same time, Blach expects consumer beef demand to continue near last year’s extraordinary pace. It was the most in 30 years, according to Blach, based on the Annual U.S. Consumer Beef Demand Index, which was near 180 in 2020, compared to just over 160 the previous year. That was with record beef, pork and poultry production.

“That speaks to the quality of the product that we’re producing in this country,” Blach says. He explained Prime and Choice beef production increased from approximately 11 to 12 billion lbs. in the early 2000s to around 18 billion lbs. last year.

Along the way, the Choice-Select spread maintained its strong pace, while the spread between Choice and the upper two-thirds of Choice grew. The Prime-Choice spread sagged this year due to the dearth of restaurant business.

“We produce more high-quality beef and consumers continue to say they want more,” Blach said. Since 2000, he noted that beef gained 7% share of total meat spending, away from pork and poultry.

Note: the above is from an upcoming article that will be published in F&R Livestock Resource.

2021-02-03T18:45:25-06:00

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.