Negotiated cash fed cattle trade was moderate to active on good demand in the Southern Plains through Wednesday afternoon, according to the Agricultural Market Service, with live prices $1 lower at $163/cwt.
Trade was moderate on good demand in Nebraska where live prices were steady at $164 and dressed prices were $1 higher at $265.
In the western Corn Belt, trade was slow on moderate demand. Although too few to trend, early live sales were $165.00-$165.50 and early dressed sales were $265. Prices there last week were $164-$165 and mostly $264, respectively.
Choice boxed beef cutout value was $1.38 higher Wednesday afternoon at $281.30/cwt. Select was $1.73 lower at $269.82/cwt.
Futures traders continued their commodities selling mode Wednesday with bearish outside markets.
Feeder Cattle futures closed an average of 51¢ lower.
Live Cattle futures closed an average of 39¢ lower.
Corn futures closed mostly 1¢ to 3¢ lower through Jly ‘24 and then mostly fractionally higher.
KC HRW Wheat closed 7¢ to 12¢ lower.
Soybean futures closed mostly 18¢ to 25¢ lower.
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Major U.S. financial indices closed lower Wednesday. Although the Fed’s decision to increase interest rates by 25 basis points was expected, apparently investors continue to gauge the stance hawkish, in light of recent bank troubles.
The Dow Jones Industrial Average closed 530 points lower. The S&P 500 closed 65 points lower. The NASDAQ was down 190 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.11 to $1.25 higher through the front six contracts.
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Food inflation at retail and foodservice last year exceeded levels reached during the Great Recession. Food inflation for the 12 months ending February 2023 was 10.2% at home and 8.4% away from home, according to Circana, formerly known as IRI and the NPD Group. Of the $2.9 trillion in consumer retail spending Circana tracks, food and foodservice spending represents the largest share, nearly $1.5 trillion.
Although the rate of away-from-home inflation isn’t as high as at home, foodservice costs are more than four times those of at-home eating occasions, with the absolute dollar gap widening, according to Circana food and beverage and foodservice industry analysts, at the company’s recent Growth Summit.
David Portalatin, Circana food and foodservice industry advisor, explained to Growth Summit attendees that higher food costs have had an impact on discretionary spending, assome of the declines in discretionary retail spending last year were due to the need to fund higher spending on food and beverage.
When faced with higher prices, Circana analysts say consumers will use multiple tactics to reduce or reallocate at- and away-from-home food spending. Those tactics include trading down to private label, buying in bulk, using more leftovers, or choosing a quick-service restaurant over a full-service restaurant.
“One of the behaviors consumers have historically used to manage higher food costs is trading down,” says Cara Loeys, Circana principal of CPG client engagement. “Consumers gravitate to larger pack sizes in the grocery store for a lower price per volume. They’ve also traded from premium to mainstay and value brands to get as much as possible without spending more. These behaviors are a correction from the pandemic when consumers, flushed with cash, purchased premium grocery items.”
While 2022 was about value pricing to manage budgets, Portalatin explains that 2023 will be about the other attributes that play into value.
“Price will always be important, but consumers define value differently. For example, consumers who visit a restaurant aren’t necessarily looking for the cheapest meal,” Portalatin explains. “They’re looking for the menu items they crave or foodservice outlets that offer quality and variety and enable them to treat themselves.”