Cattle Current Daily—March 4, 2021

Cattle Current Daily—March 4, 2021

Negotiated cash fed cattle trade and demand were light to moderate in the Southern Plains through Wednesday afternoon at $114/cwt., according to the Agricultural Marketing Service; steady with the previous week. Trade was light on moderate demand in Nebraska with dressed prices $2 lower at $180. Elsewhere, trade was limited on light demand, with too few transactions to trend.

Cattle feeders offered 1,592 head (10 lots) in Central Stockyards’ weekly Fed Cattle Exchange auction. All were from Texas, except for one lot from Nebraska. Of those offered, 757 head sold (four lots), with 167 heifers bringing an average price of $114.08/cwt. and 590 steers bringing an average of $114.00. All sales were by live weight.

Similarly, Choice steers and heifers sold steady to $1 lower at the fat auction in Tama, IA. There were 150 Choice 2-4 steers weighing an average of 1,473 lbs., bringing an average of $114.19/cwt., which was steady with the prior week’s negotiated trade.

Cattle futures closed mainly higher Wednesday, supported by lower Corn futures and oversold conditions.

Live Cattle futures closed an average of 59¢ higher, except for an average of 5¢ lower in the front two contracts.

Feeder Cattle futures closed an average of $1.28 higher, from 47¢ higher in spot Mar to $1.97 higher toward the back.

Choice boxed beef cutout value was $1.65 lower Wednesday afternoon at $233.03/cwt. Select was $1.93 lower at $224.24.

Corn futures closed 2¢ to 10¢ lower through May ‘22 and then mostly fractionally mixed.

Soybean futures closed 3¢ to 7¢ lower through Mar ‘22, and then mostly fractionally higher to 1¢ lower.

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Major U.S. financial indices closed lower Wednesday. Positive news included private sector employment increasing by 117,000 jobs from January to February according to the February ADP® National Employment ReportTM

Pressure included a higher Treasury yield rate, though not spiking as it did last week.

The Dow Jones Industrial Average closed 121 points lower. The S&P 500 closed 50 points lower. The NASDAQ was down 361 points.

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Agricultural producers surveyed for the monthly Purdue University/CME Group Ag Economy Barometer believe plant-based meat alternatives will make inroads in the total protein marketplace during the next five years.

According to the February Ag Economy Barometer report, 55% of respondents said they expect alternative protein sources to capture up to 10% of the combined market for animal and plant-based protein, while approximately 15% said they expect plant-based alternatives to capture 10% or more of the total protein market.

Respondents also believe alternative proteins gaining too much market share would impact farm income negatively.

When asked what impact they would expect to see on farm income if plant-based alternatives to animal protein capture a relatively large market share (25%) of the total protein market, a majority  said they think the impact on farm income would be negative. Approximately four out of 10 producers would expect to see farm income decline by 10% or more.

“That a majority of farmers perceive negative effects of alt-meats on the agricultural economy is consistent with: 1) the fact that some respondents are likely livestock producers, and 2) a recognition that the amount of corn and soy needed to produce alt-meats is lower than the amount needed to produce an equivalent amount of beef, pork, or chicken,” says Jayson Lusk, Purdue University agricultural economist, in his March 2 blog. 

When asked if they would be interested in pursuing a contract offered to grow a crop used in the production of plant-based meat, 62% of survey respondents said no, 16% said maybe and 23% said yes.

“That strikes me as high and may include a bit of cheap talk,” Lusk explains. “It may also be that the question was worded too vaguely. What are the conditions of the contract? What are the price premiums? Farmers would want to know answers to these questions (and more) before switching to a new crop.”

February’s Ag Economy Barometer reading of 165 was little changed compared to January when the index stood at 167.

The Current Conditions Index of 200 in February was near the all-time high. The Future Expectations Index, though, declined by 3 points to 148, marking the third decline in four months.

“Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions while concerns about possible policy changes affecting agriculture and eroding confidence in future growth in ag trade continue to weigh on producers’ future expectations,” according to the report.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses.

2021-03-03T19:31:22-05:00

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