Negotiated cash fed cattle prices were lower across a broad range last week. The weighted average five-area direct live steer price was $2.97 lower week to week on Thursday at $112.68/cwt. The dressed price was $4.13 lower at $179.17. Prices were $113.51 and $184.16 at the same time last year.
Softer cash prices, declining wholesale beef values and the outlook for continued price erosion weighed on Cattle futures Friday.
Live Cattle futures closed an average of $1.59 lower in the front four contracts, then an average of 52¢ lower (17¢ to 95¢ lower).
Feeder Cattle futures closed an average $1.15 lower, from 55¢ lower in spot Aug to $1.35 lower at the back.
Choice boxed beef cutout value was $10.78 lower Friday afternoon at $261.48/cwt. Select was $13.99 lower at $246.42.
Corn futures closed mostly 2¢ higher.
Soybean futures closed mostly 2¢ to 4¢ higher across the front half of the board and then mainly fractionally lower to 1¢ lower.
Major U.S. financial indices closed higher on Friday, buoyed by a surprising surge in employment.
Total nonfarm payroll employment rose by 2.5 million in May, according to the U.S. Bureau of Labor Statistics. The unemployment rate declined by 1.4% to 13.3%.
Average hourly earnings for all employees on private non-farm payrolls fell by 29¢ in May to $29.75, following a gain of $1.35 in April.
“Today’s report shows much higher job creation and lower unemployment than expected, reflecting that the re-opening of the economy in May was earlier, and more robust, than projected,” says U.S. Secretary of Labor Eugene Scalia. “
“Millions of Americans are still out of work, and the Department remains focused on bringing Americans safely back to work and helping States deliver unemployment benefits to those who need them. However, it appears the worst of the coronavirus’s impact on the nation’s job markets is behind us.”
The Dow Jones Industrial Average closed 829 points higher. The S&P 500 closed 81 points higher. The NASDAQ closed 198 points higher.
“Considering all the challenges the U.S. red meat industry faced in April, export results were encouraging,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF). “Exporters lost several days of slaughter and processing due to COVID-19, and shipments to Mexico and some other Latin American markets declined due to slumping currencies and the imposition of stay-at-home orders. Despite these significant headwinds, global demand for U.S. beef and pork remained strong.”
April beef exports were down 6% from a year ago to 98,613 metric tons (mt), with value falling 11% to $600.9 million, according to data released by USDA and compiled by the USMEF. But, exports achieved outstanding growth in Japan, where U.S. beef is benefiting from reduced tariffs under the U.S.-Japan Trade Agreement. Exports also trended higher to China, following the late-March implementation of the U.S.-China Phase One Economic and Trade Agreement.
For January through April, beef exports totaled 433,316 mt, up 5% from a year ago, valued at $2.66 billion (up 3%).
With lower April slaughter numbers, beef export value per head of fed slaughter climbed to a record $363.35, up 19% from April 2019. For the first four months of the year, per-head export value increased 5% to $326.47.
“International customers are relieved to see U.S. production rebounding, solidifying our position as a reliable supplier,” Halstrom says. “This helps address a major concern for buyers, as COVID-19 has disrupted meat production in many countries, not just the United States. Demand remains robust for U.S. red meat, especially at retail, but USMEF is actively working with our foodservice customers across the globe to help ensure a strong recovery for the restaurant, catering and hospitality sectors. Many are adjusting to an entirely new business climate, and the U.S. industry assisting them in this process can help ensure that U.S. pork, beef and lamb will be featured on their menus.”
U.S. pork exports in April were 264,048 mt, up 22% from a year ago but the lowest since November 2019. Export value of $682.8 million was up 28% year-over-year but the lowest since October 2019. Through the first four months of 2020, pork exports remain on a record pace at 1.1 million mt, up 35% from a year ago, with value up 45% to $2.91 billion.