Negotiated cash fed cattle trade continued on Wednesday at mainly steady prices, with live sales at $95/cwt. in the Southern Plains and $96 in the Northern Plains, according to the Agricultural Marketing Service. Dressed trade in the western Corn Belt was at $157-$160.
Cattle feeders offered 1,224 head in the weekly Fed Cattle Exchange auction. Of those, 275 head–three Kansas lots–sold for a weighted average price of $95.62/cwt. with delivery of 1-9 days.
Choice 2-4 steers (169 head) weighing an average of 1,379 lbs. brought an average of $101.79 at the fat auction in Tama, IA, which was 50¢ to 75¢ lower than the prior week.
At Sioux Falls Regional in South Dakota, though, slaughter steers and heifers sold steady to $2 higher. There were 459 Choice 2-3 steers weighing an average of 1,451 lbs. and bringing an average of $100.88.
Cattle futures bounced higher, supported by firm cash fed cattle, as well as current cash demand for feeder cattle.
Live Cattle futures closed an average of 85¢ higher (30¢ higher at the back to $2.50 higher in spot Aug).
Feeder Cattle futures closed an average of $1.40 higher (32¢ higher to $2.70 higher in spot Aug).
Choice boxed beef cutout value was 16¢ lower Wednesday afternoon at $200.76/cwt. Select was 52¢ higher at $191.37.
Corn futures closed mostly fractionally higher.
Soybean futures got a boost from Wednesday’s announcement that China bought 389,000 metric tons for delivery in 2020-21.
Soybean futures closed 4¢ to 8¢ higher through Mar ’21 and then mostly 3¢ higher.
Major U.S. financial indices continued higher Wednesday, with promising trial results for a COVID-19 vaccine (Moderna), as well as quarterly earnings from Goldman Sachs that beat expectations.
The Dow Jones Industrial Average closed 227 points higher. The S&P 500 closed 29 points higher. The NASDAQ closed 61 points higher.
COVID-19 is accelerating the divergence between full service restaurants (FSRs) and quick service restaurants (QSRs) that began before the pandemic, according to David Portalatin, food industry advisor for The NPD Group (NPD).
“Long before anyone ever heard of social distancing, consumers were showing an increasing preference for off-premise restaurant meals. Then suddenly this March, we entered a reality where the entire restaurant industry was off-premise only,” Portalatin explains. “That harsh reality was far harsher for FSRs, a segment that saw transaction declines near 80% or worse at the depth of the pandemic in the U.S. In contrast, QSR declines were roughly half as severe thanks to their abundance of drive-thru windows, capacity for high volume pick-up, and the ability of large QSR chains to leverage digital apps as an accelerant, as well as provide a contactless experience.”
For current perspective, FSR customer transactions were 30% less than a year earlier for the week ending July 5, representing a week-to-week decline of 5%, according to NPD’s CREST®Performance Alerts. Conversely, QSR customer transactions that same week continued to improve, up 4% week to week to a level that was 13% less year over year.
Since mid-March, when the pandemic closed dine-in services, Portalatin explains QSR chains doubled down on their off-premise prowess with streamlined menus optimized for volume and efficiency and by expanding drive-thru capacity with reconfigured traffic flow and added lanes. These and other changes allow continued improvement in QSR customer transactions, whether or not government regulations allow reopening dining rooms.
In fact, Portalatin says many QSR chain operators are finding the incremental cost of opening a dining room to be greater than any incremental margin dollars they might gain and are remaining closed even when governing bodies allow reopening.
FSR performance, on the other hand, remains largely at the mercy of governmental regulation and the persistence of the coronavirus.
Pivoting to off-premise is far more difficult for many FSRs, Portalatin explains. These restaurants can employ similar tactics as QSRs, like streamlined menus, and temporary drive-thrus, but none play to the inherent strengths of FSRs. Moreover, as on-premise dining restrictions ease, he says many FSR operators are forced to dismantle much of their temporary off-premise infrastructure so that guests can park, have a waiting area that allows for social distancing, and labor can be redirected to the front of the house.