Negotiated cash fed cattle trade was at a standstill through Monday afternoon, except for mostly inactive on very light demand in the western Corn Belt, according to the Agricultural Marketing Service.
Prices last week ended up steady on a live basis in the Southern Plains at $114/cwt., steady to $1 lower in the Northern Plains at $113-$114 and steady to $2 lower in the western Corn Belt at $112-$114. Dressed trade was $2 lower at $180.
The five-area average direct steer price last week was 43¢ lower on a live basis at $113.64/cwt. and $1.84 lower in the beef at $179.79.
Cattle futures closed higher Monday, supported by increasing optimism about further reopening the domestic economy and more positive fundamentals on the horizon.
Live Cattle futures closed an average of 59¢ higher.
Feeder Cattle futures closed an average of 61¢ higher, except for 7¢ lower in May.
Choice boxed beef cutout value was 25¢ lower Monday afternoon at $231.08/cwt. Select was $2.28 higher at $223.13.
Corn futures closed mostly fractionally higher to 1¢ higher.
Soybean futures closed mostly 3¢ to 8¢ higher.
Major U.S. financial indices closed mixed Monday. Key support included the Senate passing the $1.9 trillion pandemic relief legislation over the weekend, with expectations the House of Representatives will follow suit. Pressure included the outlook for higher inflation and interest rates.
The Dow Jones Industrial Average closed 306 points higher. The S&P 500 closed 20 points lower.The NASDAQ was down 310 points.
“Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient, but a range of logistical challenges must be overcome in order to fully satisfy this demand,” says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF).
For instance, Halstrom explains transportation challenges are currently a dominant concern, especially congestion and container shortages at West Coast ports where shorthanded crews are handling record-large cargo volumes.
“Labor is also at a premium in processing plants, which affects the industry’s ability to fully capitalize on demand for certain labor-intensive cuts and variety meat items,” Halstrom says.
Such challenges helped pressure U.S. beef and pork exports to start the year.
U.S. Beef exports were 2% less year over year in January at 105,047 metric tons (mt), according to data released by USDA and compiled by USMEF. Value was 3% less at $653 million. Lower beef variety meat shipments drove the decline as muscle cut exports were steady with a year earlier.
January beef exports to South Korea were strong and continued to gain momentum in China.
U.S pork exports in January of 248,656 mt, were 9% less than a year earlier. Export value was 13% less at $642.8 million.
Although exports still face the aforementioned transportation and labor challenges, as well as COVID-related obstacles, Halstrom says, “As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong and the expectation that foodservice will rebound in more and more regions.”