Negotiated cash fed cattle trade was limited on light demand in all major feeding regions through Thursday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are steady to $2 lower in the Southern Plains at $120-$122/cwt. and unevenly steady in the North at $124-$126. Dressed prices are steady to $1 higher at $197-$198.
Cattle futures rallied back Thursday, following heavy pressure from grains in the previous session.
Live Cattle futures closed an average of $1.03 higher.
Feeder Cattle futures closed an average of $1.27 higher.
Choice boxed beef cutout value was $2.17 lower Thursday afternoon at $230.23/cwt. Select was $1.52 lower at $205.35.
The average dressed steer weight the week ending June 19 was 879 lbs., according to USDA’s Actual Slaughter Under Federal Inspection report. That was 3 lbs. lighter than the previous week and 11 lbs. lighter than the same week last year. The average dressed heifer weight was 2 lbs. heavier week to week at 813 lbs., but 10 lbs. lighter than a year earlier.
Corn and Soybean futures finished Thursday a touch softer amid volatile trade, following the previous day’s limit-up and near limit-up moves in the front months.
Corn futures closed mostly 1¢ to 3¢ lower.
Soybean futures closed down between 1¢ and 3¢ lower through the front six contracts and then mostly 3¢ to 6¢ lower.
Major U.S. financial indices closed higher Thursday on positive economic reports, including a new low in initial jobless claims since the pandemic started and news that U.S. manufacturing expanded.
For the week ending June 26, initial unemployment insurance claims tallied 364,000, which was 51,000 fewer than the previous week and the lowest level since March 14 last year.
The Dow Jones Industrial Average closed 131 points higher. The S&P closed 22 points higher. The NASDAQ was up 18 points.
“Currently, U.S. cattle inventories are cyclically high, but beef demand is also high both domestically and in our major export markets. The clearest solution to meeting this demand while fostering profitability throughout the supply chain is to expand beef processing capacity,” according to comments from the Texas Cattle Feeders Association (TCFA). These comments were submitted in response to the supply chain executive order (14017) issued by the Biden administration earlier this year. In part, the order seeks to develop initiatives that bolster cattle and beef supply chain resiliency.
“Meatpackers of all sizes face similar operational challenges, the most consistent and severe of which is labor recruitment and retention. The largest barrier to entry, however, is access to sufficient capital for construction,” according to the TCFA comments. “The industry average startup cost for a meat processing facility is roughly $100,000 per hook. This means that a 1,000-head-per-day plant would need to secure $100 million in financing just to build the infrastructure. As a further complication, traditional lending institutions are sometimes unable to provide adequate financing due to the capital requirements of meatpacking business models.”
Although expanding domestic beef processing capacity is a key mid-to-long term strategy to improve supply chain resiliency, TCFA also points out current infrastructure offers added opportunity.
“Most major meatpackers are not operating plants at 100% throughput capacity,” according to TCFA. “Unfortunately, due to the proprietary nature of firm-by-firm and plant-by-plant efficiency data, the exact number of hooks which are not being utilized is unknown. TCFA urges USDA to examine ways to support the industry in reaching 100% processing capacity utilization.”