Negotiated cash fed cattle trade for last week, through Friday afternoon was mainly $127/cwt. on a live basis in the Northern Plains and the Southern Plains. That was mostly $1 less than the previous week. Dressed trade on the western Corn belt was steady at $204-$205.
Cattle futures gained with support from the continued rally in Lean Hog futures and likely near-term support from the latest round of winter. Presumably, the former is tied to the week’s export data from USDA, which indicates pork exports to China. If so, such optimism seems a stretch.
Live Cattle futures closed an average $1.19 higher (75¢ higher at the back to $1.70 higher in spot Apr).
Feeder Cattle futures closed an average of $1.21 higher (22¢ higher to $2.27 higher).
Corn futures closed 1¢ to 3¢ higher.
Soybean futures closed mostly 5¢ to 10¢ higher.
Wholesale beef values were lower on light to moderate demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 71¢ lower Friday afternoon at $226.99/cwt. Select was $1.42 lower at $217.34.
Major U.S. financial indices closed higher Friday, buoyed by tech stocks and apparent growing optimism over a U.S.-China trade deal.
The Dow Jones Industrial Average closed 138 points higher. The S&P 500 closed 14 points higher. The NASDAQ was up 57 points.
“Robust demand provides incentives for continued growth of the U.S. livestock sector over the next 10 years,” say analysts, in the USDA Projections to 2028, released last week. “In the beef cattle industry, the feed price ratio (cattle price/feed price) is expected to decline over the projection period, reflecting both lower cattle prices and higher feed prices, suggesting lower returns to production.”
USDA’s annual projections provide a starting point for discussion of alternative outcomes, according to report authors. They emphasize, “The scenario presented in this report is not a USDA forecast about the future. Instead, it is a conditional, long-run scenario about what would be expected to happen under a continuation of current farm legislation and other specific assumptions.”
With that said, these are some report highlights.
- “Global real economic growth is projected to average roughly 2.8% annually over the next decade. The United States is expected to have among the highest growth of the developed countries, averaging approximately 2.0% annually, while developed countries as a group are expected to experience an average of 1.6%.”
- “Rising corn prices early in the period contribute to a decreasing beef cattle feed price ratio. As cattle prices decline, the ratio also drops, reducing production (expansion) incentives for cattle producers. Despite cattle numbers, which are expected to decline over the middle part of the forecast horizon, increased slaughter weights support gains in beef production. Overall, beef production levels are expected to rise at less than 1% per year.”
- “Prices for most crops continue to remain low relative to the recent past as U.S. and global production responded to the earlier high prices. Prices are expected to rise over the first half of the projection period and thereafter decline moderately, reflecting long-term growth in global demand for agricultural products and continued biofuel feedstock demand.”