Negotiated cash fed cattle trade was mostly inactive on light demand in the Southern Plains through Thursday afternoon, according to the Agricultural Marketing Service. In Nebraska and the Western Corn Belt, trading was limited on light demand. A few live sales in Nebraska traded at $125-$126.
Last week, live prices were at $122/cwt. in the Southern Plains and $124 in the North. Dressed prices were at $195.
Cattle futures faded early pressure Thursday to close mostly higher, perhaps with positioning ahead of this afternoon’s Cattle on Feed report. Heading into mid-day Friday, Feeder Cattle futures continued to edge higher, while Live Cattle were mostly a touch softer.
Live Cattle futures closed an average of 47¢ higher, except for 25¢ lower in near Aug.
Feeder Cattle futures closed an average of 84¢ higher, from 52¢ higher to $1.45 higher at the front.
Choice boxed beef cutout value was $4.63 lower Thursday afternoon at $312.05/cwt. Select was 73¢ higher at $276.14.
Corn and Soybean futures continued mostly lower Thursday with weather pressure.
Corn futures closed mostly 1¢ to 2¢ lower.
Soybean futures closed 7¢ to 13¢ lower through Aug ’22, and then mostly 1¢ to 2¢ lower.
Major U.S. financial indices rose to all-time highs on Thursday as agreement was announced on a $579 billion infrastructure plan.
The Dow Jones Industrial Average closed 323 points higher. The S&P 500 closed 25 points higher. The NASDAQ was up 97 points.
As noted in Cattle Current Thursday, Dustin Aherin, RaboResearch animal protein analyst, shared insight about planned beef packing capacity expansion in his testimony to the U.S. Agriculture Committee. He also cited the estimated cost of $100-$200 million per 1,000 head of daily capacity.
Today, the National Cattlemen’s Beef Association (NCBA) announced it secured introduction of the Butcher Block Act in the U.S. House, a bipartisan bill that would provide critical funding to expand capacity for small, regional, and independent processing facilities.
“When there’s not enough capacity to process the current supply of live cattle, our producers lose leverage in the market. Expanding capacity is an essential component of the multifaceted effort to increase the opportunities for profitability for cattle producers, and we’ve been hearing for months that the two biggest obstacles standing in the way of that are lack of capital and lack of labor,” says NCBA President Jerry Bohn. “The Butcher Block Act addresses both of those hurdles, and would go a long way to alleviating the bottleneck that is depressing live cattle prices for our farmers and ranchers.”
Introduced by Rep. Dusty Johnson (R-SD) and Rep. Abigail Spanberger (D-VA), the legislation would establish a stand-alone loan program through the U.S. Department of Agriculture (USDA) to help processors expand capacity, improve marketing options for cattle producers, and encourage competitive markets and pricing for live cattle.
The legislation would also authorize the Secretary of Agriculture to establish a grant program that would support a range of research and training efforts aimed at strengthening the workforce to meet labor needs, and helping processors become federally inspected.
A recent study by Rabobank found that under the current dynamics of supply and demand, the industry could economically accommodate an additional 5,700 hooks per day of processing capacity, or processing roughly 1.5 million additional head per year. However, access to capital is a major barrier. The average start-up cost for a beef processing facility is roughly $100,000 per hook, which means that someone trying to open a modest 25-hear-per-day facility has to secure $2.5 million in financing just to turn on the lights.