Negotiated cash fed cattle trade was at a standstill in the Southern Plains through Friday afternoon, according to the Agricultural Marketing Service. Elsewhere, it ranged from limited to mostly inactive on light demand with too few transactions to trend.
Negotiated cash fed cattle prices for the week were mainly steady at mostly $120/cwt. on a live basis, except for $2 higher in the western Corn belt at $122. Dressed trade was steady at $190-$191.
Cattle futures gained Friday with support from softer Corn futures, continued elevated consumer demand and the likelihood improved supply fundamentals are getting closer.
Feeder Cattle futures closed an average of $2.19 higher ($1.57 higher at the back to $2.77 higher at the front).
Live Cattle futures closed an average of $1.16 higher.
Choice boxed beef cutout value was 48¢ lower at $337.77/cwt. Select was $4.89 lower at $305.51.
Estimated total cattle slaughter the week ending June 12 was 665,000 head, according to USDA. That was 127,000 more than the previous holiday-shortened week. Estimated beef production of 545.7 million lbs. was 102.7 million lbs. more.
Corn and Soybean Futures softened Friday with more near-term rain forecast for the Corn Belt and likely week-end profit taking.
Corn futures closed mostly 1¢ to 6¢ lower, except for 14¢ and 8¢ lower in the front two contracts.
Soybean futures closed 20¢ to 35¢ lower through Jan ‘22, 11¢ to 18¢ lower through the next five contracts, and then mostly 3¢ to 6¢ lower.
Major U.S. financial indices closed higher again Friday, with investors apparently feeling confident the surging inflation suggested by the previous day’s Consumer Price Index is transitory.
The Dow Jones Industrial Average closed 13 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 49 points.
USDA announced Friday it is beginning work on three proposed rules to support enforcement of the Packers and Stockyards (P&S) Act.
“The Packers and Stockyards Act is a vital tool for protecting farmers and ranchers from excessive concentration and unfair, deceptive practices in the poultry, hog, and cattle markets, but the law is 100 years old and needs to take into account modern market dynamics. It should not be used as a safe harbor for bad actors,” says Agriculture Secretary Tom Vilsack. “The process we’re beginning today will seek to strengthen the fairness and resiliency of livestock markets on behalf of farmers, ranchers and growers.”
First, USDA intends to propose a new rule that will provide greater clarity to strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices. Second, USDA will propose a new poultry grower tournament system rule, with the current inactive proposal to be withdrawn. Third, USDA will re-propose a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act.
As an aside, the latter point will likely be a sticky subject. Previously, much of the cattle industry rallied against a similar proposal. In part, the opposition was based on worries that it would lead packers to pay the same price to everyone — no premiums or discounts — rather than risk lawsuits.
USDA’s pending action was noted in the Unified Agenda of Regulatory and Deregulatory Actions released by the White House Office of Management and Budget (OMB).
Earlier last week, USDA announced $4 billion in assistance as part of the Build Back Better initiative, an effort designed to strengthen and transform critical parts of the U.S. food system. Investments made through Build Back Better will include a mix of grants, loans and innovative financing to address the shortage of small meat processing facilities across the country as well as the necessary local and regional food system infrastructure needed to support them.