Negotiated cash fed cattle trade was limited on light demand in Kansas through Thursday afternoon, according to the Agricultural Marketing Service. There were a few live trades at $112/cwt., which was $2 higher than last week.
Trade was mostly inactive on light demand in Nebraska and the western Corn Belt with too few transactions to trend. It was at a standstill in the Texas Panhandle and Colorado.
The average dressed steer weight the week ending Jan. 16 was 925 lbs., which was 2 lbs. heavier than the previous week and 18 lbs. heavier than the same week last year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 850 lbs. was 1 lb. lighter than the prior week but 16 lbs. heavier than the previous year.
Cattle futures edged lower Thursday amid light trade.
Live Cattle futures closed an average of 38¢ lower, except for 7¢ higher in near Apr.
Feeder Cattle futures closed an average of 41¢ lower, other than 7¢ and 10¢ higher at either end of the board.
Choice boxed beef cutout value was $2.33 higher Thursday afternoon at $231.99/cwt. Select was $1.89 higher at $220.88.
Corn futures closed fractionally mixed to 1¢ higher through the front three contracts, 3¢ lower through Jly ‘22, and then mostly fractionally lower.
Soybean futures closed mostly 14¢ to 21¢ lower.
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Major U.S. financial indices rebounded Thursday, paring some of the steep losses from the previous session. Support included estimate-beating quarterly corporate earnings from the likes of American Airlines and Apple.
Although a bit less than traders expected, fourth-quarter GDP came in at 4.0%, according to the U.S. Bureau of Economic Analysis.
Also, weekly initial unemployment insurance claims came in less than expected at 847,000, according to the U.S. Department of Labor. That was 67,000 fewer than the previous week.
The Dow Jones Industrial Average closed 300 points higher. The S&P 500 closed 36 points higher. The NASDAQ was up 66 points.
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“As the U.S. foodservice sector climbs out of the hole left by 2020, the animal protein sector will not only need to realign itself with the survivors of the last year, but also remain flexible,” says Will Sawyer, lead animal protein economist with CoBank.
In the new Great Grocery Grab report from CoBank’s Knowledge Exchange Division, Sawyer explains the importance of individual foodservice channels varies significantly by animal protein species and by producer.
For instance, ground beef makes up a majority of beef volume through foodservice, but it represents only about one-third of the value due to its low price point. Conversely, the high-value steaks and roasts that are primarily sold in full-service restaurants and hotels comprise a quarter of the volume of beef sold through foodservice but nearly half of beef sales.
Some foodservice channels rebounded through the pandemic to achieve sales growth, as evidenced by the positive comparable-store sales at quick-service and fast casual restaurant concepts since the summer.
Full-service restaurants, however, continue to face double-digit declines in sales. In November, full-service restaurant sales were down 36% compared to last year while total foodservice sales were down 17%. Sawyer adds that in-restaurant dining will be vulnerable as long as consumers remain wary of dining indoors and COVID-19 cases remain elevated.
Although foodservice sales continue to improve, the report suggests sales may not return to pre-pandemic levels until the second half of 2022.
Relative to the realignment and flexibility mentioned earlier, according to the report, “In many cases that includes the large, publicly traded, franchise and multi-location limited-service restaurants. For beef, that could very well mean a long-term shift in high-value steak consumption to retail as the upscale restaurants have been especially hard hit and seen a significant number of closures.”