Cattle Current Daily—Feb. 8, 2021

Cattle Current Daily—Feb. 8, 2021

Negotiated cash fed cattle trade and prices were mostly $1 higher in the Southern Plains at $114/cwt. on a live basis, with moderate trade and demand, according to the Agricultural Marketing Service.

In Nebraska, trade was slow to moderate with moderate demand through Friday afternoon. Live prices were steady to $1 higher at $112-$114, but mostly $114. Dressed trade there on Thursday was steady to $2 higher at $178-$180.

Live prices in the western Corn Belt on Thursday were at $112-$114, which was generally $1.50-$2.00 higher. Dressed prices were mainly steady to $2 higher at $178-$180.

The average dressed steer weight the week ending Jan. 23 was 926 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 1 lb. heavier than the previous week and 25 lbs. heavier than the prior year. The average dressed heifer weight of 851 lbs. was 1 lb. heavier than the previous week and 19 lbs. heavier than the prior year.

Total estimated cattle slaughter last week was 653,000 head, the same as the previous week; 22,000 head more than the same week last year. Year-to-date estimated cattle slaughter of 3.34 million head is 178,000 fewer (-5.0%) than the same time last year.

Cattle futures edged lower Friday, with recently softer wholesale beef values, some likely week-end profit taking, and in the face of higher cash prices.

Live Cattle futures closed an average of 21¢ lower, except for an average of 15¢ higher in the front two contracts.

Feeder Cattle futures closed an average of 48¢ lower, from 25¢ lower at the back to $1.22 lower in spot Mar.

Corn futures closed fractionally mixed to 1¢ lower through Jly ’22 and then 3¢ to 9¢ higher.

Soybean futures closed 1¢ to 3¢ higher, except for 1¢ to 5¢ lower in the front three contracts.

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Major U.S. financial indices continued higher Friday.

Month-to-month non-farm payroll increased by 49,000 in January, according to the U.S. Bureau of Labor Statistics. That was a touch softer than expectations. The unemployment rate fell by 0.4% to 6.3%. Average hourly earnings for all employees on private non-farm payrolls increased by 6¢ to $29.96.

The Dow Jones Industrial Average closed 92 points higher. The S&P 500 closed 15 points higher. The NASDAQ was up 78 points.

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Plant-based alternatives to traditional meats remain a tiny percentage of domestic consumption, but deserve attention in understanding the marketplace.

In recent survey-based research funded by the beef checkoff, given a choice between selecting beef or a plant-based alternative, approximately 25% would choose the latter. However, authors of the report—The Impacts of New Plant-Based Protein Alternatives on U.S. Beef Demand—say that comes with some caveats.

“Some of the individuals who choose the plant-based alternative are unlikely to consume much, if any, beef. In this sense, growth in the market share of plant-based alternatives is not entirely coming at the cost of reduced beef demand, and indeed if a plant-based alternative simply replaces a substitute competitor (like a chicken sandwich) or reflects overall growth in protein demand, the impacts on beef demand are likely to be negligible,” explain the agricultural economists behind the study: Jayson Lusk at Purdue University, Glynn Tonsor and Ted Schroeder at Kansas State University.

“Nonetheless, the fact that roughly a quarter of consumers indicate they’d choose a plant-based alternative suggests there is ample room for this market to grow, relative to its current position of under 1% market share,” they say. “Stated differently, our estimates suggest we will likely continue to witness significant growth in the plant-based alternative market even if all that changes is increased availability; and prices remain fixed at the status quo and consumer preferences and beliefs remain unchanged.”

Among the main findings:

  • Cattle-based beef is currently chosen in the marketplace about three times more often than plant-based protein alternatives.
  • Beef has a good image. Consumers’ perceptions of Taste, Appearance, Price, and Naturalness of beef greatly exceeds that for plant-based proteins. Average response scores for 15 meat/protein attributes indicate more consumers favor beef over plant-based protein. Overall consumer perceptions of nutrients accurately reflect information posted on nutrient contents panels of both beef and plant-based retail items.
  • Regular meat consumers (68% of the study’s full sample) are much less likely to select a plant-based item when a beef item is available. The typical regular meat consumer is willing to pay $1.87 more at a restaurant for a beef burger meal than a Beyond Meat burger meal. Conversely, those declaring an alternative diet (Vegan, Vegetarian, Flexitarian, or other) are willing to pay $1.48 more for a Beyond Meat than beef burger meal. Likewise, in retail settings the typical regular meat consumer is willing to pay $0.29/lb. more for store-brand, 80% lean ground beef than Beyond Meat, while those with an alternative diet would pay $2.32/lb. more for Beyond Meat than beef.
  • Characteristics of consumers most likely to select plant-based proteins include younger, those with children under the age of 12, having higher household income, residing in a Western state, and affiliating with the Democratic party. Consumers who select plant-based proteins place greater importance on environmental and animal welfare concerns when making food choices than consumers predicted to choose traditional animal proteins.

“Perhaps now more than ever it is essential for the industry collectively to accurately identify its comparative advantage and leverage that in subsequent strategic efforts,” say the researchers. “In many ways we do not believe existence of plant-based proteins alters the industry’s global comparative advantage as a major, grain-finished beef industry. Nonetheless, this and other foundations of the industry’ comparative advantage must underpin future industry efforts.”

Last week, Impossible Foods, maker of the Impossible Burger, cut suggested retail prices by 20% for grocery stores throughout the United States. The company is introducing similar price cuts at retail stores in Canada, Singapore and Hong Kong.

2021-02-06T17:10:36-05:00

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