Although too few transactions to trend, there was some early negotiated cash fed cattle trade Tuesday. Live prices in the Southern Plains were on either side of steady at $95/cwt. in the Texas Panhandle and $95.00-$97.50 in Kansas, according to the Agricultural Marketing Service. Early dressed sales in the western Corn Belt were at $161, compared to $158 last week.
Cattle futures closed higher Tuesday, off of session highs and square in the same trading channel of recent weeks.
Live Cattle futures closed an average of 48¢ higher (22¢ to $1.17 higher).
Feeder Cattle futures closed an average of 78¢ higher (15¢ to $1.67 higher).
Choice boxed beef cutout value was 41¢ higher Tuesday afternoon at $202.96/cwt. Select was $1.81 lower at $188.32.
Corn futures closed mostly 3¢ to 4¢ lower.
Soybean futures closed 8¢ to 12¢ lower.
Major U.S. financial indices closed lower Tuesday. Pressure included some likely profit taking in tech stocks and uncertainty about how quickly lawmakers will come to terms on another round of federal economic aid to address COVID-19.
The Dow Jones Industrial Average closed 205 points lower. The S&P 500 closed 20 points lower. The NASDAQ closed 134 points lower.
Surging COVID cases across the nation and subsequent rollbacks in re-opening plans are stalling the U.S. restaurant industry’s recovery, according to The NPD Group. Since the second week of June, declines in major restaurant chain customer transactions range from 11% to 14% less than a year earlier. Until then, declines improved steadily for about six weeks.
“I believe there is still a lot of upside recovery for restaurants, but for now we’re stuck in neutral until we can get the industry operating at full capacity,” says David Portalatin, NPD food industry advisor. “The recovery phase will then tell us whether the industry can recapture enough customer traffic to get back to the pre-COVID baseline, or whether the new normal will reflect a re-set where consumers prepare more meals in their home kitchens for a longer term.”
Major restaurant chain total customer transactions were 12% less year over year for the week ending July 19, which was 2% more positive than the prior week, according to NPD’s CREST® Performance Alerts.
That same week, 78% of restaurants were in geographies permitting on-premises dining with varying capacity restrictions. For instance, 13% of the nation’s restaurant units are in California, where on-premise dining is prohibited.
Moreover, many restaurants continue to operate at capacities that are significantly less than normal in terms of menu offerings and store hours. Restaurant operators make those decisions based partly on the pandemic situation overall and partly on the difficulty in attracting labor.
Quick service restaurant chains (QSR) were responsible for improving customer transaction declines for the week ending July 19. QSR transactions were 11% less compared to the prior year. Full service restaurant (FSR) chain transactions were down 27%. According to NDP, FSR transactions would be worse without a significant shift to off-premises. In June, FSR off-premises traffic increased 91% versus year ago, while on-premises traffic declined 62%.
“Certainly full service restaurants need to recover their lost on-premises business since that will always be their main source of volume,” says Portalatin. “But, I wouldn’t be surprised to see new casual dining models emerge that are designed to optimize off-premises capabilities for the long-term.”