Concerns about less corn and wheat exports from Ukraine and Russia, due to the war, continued to underpin futures prices Friday. As time wears on, there is also concern about fertilizer exports from the region.
Corn futures closed 5¢ to 8¢ higher, except for 10¢ to 29¢ higher from near Jly to next Mar.
Soybean futures closed mostly 7¢ to 8¢ lower.
Cattle futures sagged beneath the weight of escalating feed prices Friday.
Feeder Cattle futures closed an average of $2.47 lower (90¢ at the back to $3.27 lower toward the front).
Live Cattle futures closed an average of $1.53 lower (80¢ to $2.62 lower).
Negotiated cash fed cattle trade was mostly inactive on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.
For the week, live prices were $2 lower in the Southern Plains at $140/cwt., $2-$4 lower in Nebraska at $140 and $1 lower in the western Corn Belt at $143. Dressed prices were $2-$3 lower at $224-$225.
The average five-area direct fed steer price was $2.64 lower week to week on Thursday at $140.76/cwt. The average steer price in the beef was $2.40 lower at $224.62.
Choice Boxed beef cutout value was 2¢ lower Friday afternoon at $254.33/cwt. Select was 62¢ higher at $248.41.
Estimated total cattle slaughter last week of 658,000 was 11,000 head more than the previous week but 8,000 head fewer than the same week last year. Estimated year-to-date total cattle slaughter of 5.83 million head is just 17,000 head fewer than the same time last year.
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Major U.S. financial indices closed lower Friday, amid continued pressure from Russia’s war on Ukraine, and despite a more positive jobs report than expected.
Total non-farm payroll employment rose by 678,000 in February, according to the U.S. Bureau of Labor Statistics, pushing the unemployment rate down to 3.8%. Average hourly earnings for private non-farm employees was static at $31.58.
The Down Jones Industrial Average closed 179 points lower. The S&P 500 closed 34 points lower. The NASDAQ was down 224 points.
West Texas Intermediate Crude Oil Futures (CMW) were up a staggering $7.31 to $8.01 through the front six contracts.
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Fundamental changes are transforming the beef supply chain from a just-in-time delivery model toward a just-in-case approach. Managing the costs associated with these changes may result in a shift of the historical live cattle and retail beef price ratio, according to a recent RaboResearch report.
“While a cattle producer has little or no control over what happens in the beef supply chain post-harvest, it will be important for livestock producers to be aware of changes occurring throughout the supply chain,” says report author, Don Close, senior animal protein analyst with Rabo AgriFinance. “Any changes, any inventory building, any additional controls and inspections could have a direct impact on the total cost of beef to the end user, which could change historical norms for live-to-wholesale and live-to-retail price spreads.”
Meat processors, distributors and retailers are striving to build supply resiliency into the beef supply chain and reduce the risk of another round of empty grocery store shelves in the future, according the report, which explores these major drivers:
- Automation in packing plants to increase the efficiency of their labor force
- Packaging that extends shelf life, is more durable for grocery delivery and meets sustainability expectations
- Government and investor-led sustainability demands, which may require more documentation and verification methods throughout the supply chain
- The transportation system’s technology and infrastructure overhaul that reduces carbon emissions and the risk for backlogs
The area of change with the greatest potential direct impact on cattle producers is meatpacking plants’ embedding more automation into their facilities, according to Rabo AgriFinance analysts. The report notes that the initial introduction of advanced technology will not serve as a replacement for labor, but will serve to make labor more efficient. However, the transformation toward greater automation will require a workforce with different skill sets or extensive retraining.
“The challenge of finding and retaining a ready workforce has increased labor costs to the tipping point where investments into technology, robotics and software advancements become economical,” Close explains. “Anything that de-risks packers from becoming a dam that slows the flow of market-ready cattle is a win for cattle producers.”