Cattle futures were sharply lower Friday, pressured by bearish outside markets and another week of lower negotiated cash fed cattle prices. Also on Friday, the United Food and Commercial Workers Local 7, which represents workers at the JBS plant, gave notice that it was cancelling its extension agreement effective 11:59 p.m., March 15. So, workers could go on strike as soon as March 16 (see related news below).
Live Cattle futures closed an average of $4.13 lower. Feeder Cattle futures closed an average of $7.26 lower.
Week to week on Friday, Live Cattle futures closed an average of $1.33 higher (47¢ to $2.35 higher), recapturing some of the previous week’s losses. Feeder Cattle futures closed an average of $1.01 higher (20¢ higher at the front to $1.72 higher toward the back of the board).
Negotiated cash fed cattle trade ranged from active on good demand in Nebraska to moderate on good demand in the western Corn Belt through Friday afternoon, according to the Agricultural Marketing Service.
FOB live prices were $240/cwt., which was generally $2 lower in Nebraska and $3 lower in the western Corn Belt. Dressed delivered prices were $380, which was $3 lower in Nebraska and $2-$3 lower in the western Corn Belt.
Trade was limited on moderate to good demand in the Southern Plains with too few transactions to trend. FOB prices the previous week were $244.
Choice boxed beef cutout value was 33¢ higher Friday afternoon at $387.22/cwt. Select was $1.66 lower at $378.95. Week to week on Friday, Choice boxed was $7.38 higher and Select was $4.64 higher.
Estimated total cattle slaughter last week of 521,000 head was 2,000 head more than the previous week but 58,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 5 million head was 555,000 head fewer (-10%) than the same time last year. Year-to-date estimated total beef production of 4.4 billion pounds was 374.9 million pounds less (-7.8%).
Grain and Soybean futures continued higher Friday, buoyed by higher energy prices and inflationary hedging by funds.
Kansas City HRW Wheat futures closed 23¢ to 31¢ higher through May ‘27. Soybean futures closed 10¢ to 21¢ higher through near Nov and then mostly 2¢ to 8¢ higher. Corn futures closed mostly 4¢ to 8¢ higher. Week to week on Friday, Corn futures closed an average of 13’4¢ higher through the front six contracts, an average of 20’6¢ higher in the last two weeks.
******************************
Major U.S. financial indices sagged lower Friday, weighed down by sharply higher Crude Oil futures, tied to the U.S.-Israel attacks on Iran, as well as an unexpectedly dismal employment reading.
Rather than gaining, as many anticipated, total nonfarm payroll employment edged down by 92,000 in February, and the unemployment rate edged higher to 4.4%, according to the U.S. Bureau of Labor Statistics.
In February, average hourly earnings for all employees on private nonfarm payrolls rose by 15¢ to $37.32. Over the past 12 months, average hourly earnings have increased by 3.8%.
The Dow Jones Industrial Average closed 453 points lower. The S&P 500 closed 90 points lower. The NASDAQ was down 361 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were $2.82 to $9.89 higher through the front six contracts. Week to week on Friday, those contracts were an average of $14.84 higher.
******************************
As mentioned earlier, the United Food and Commercial Workers Local 7, which represents workers at the JBS plant in Greeley, Colo., gave notice that it was cancelling its extension agreement, paving the way for workers to potentially go on strike as soon as March 16. Uncertainty caused by the potential continues to roil Cattle futures prices.
Packers are struggling with historically high fed cattle prices despite historically high wholesale beef prices and even higher retail beef prices. All has everything to do with historically low cattle numbers, in tandem with extraordinary consumer beef demand. The market logic is straightforward.
Yet, Senator Chuck Schumer (D-NY) and other Senate Democrats took aim at high beef prices last week with legislation that could do nothing but drive prices higher.
The Family Grocery and Farmer Relief Act (FGFRA) bill introduced by Senator Schumer and others would, according to the authors, “… break up dominant meatpackers, rein in foreign controlled corporate giants, and use federal tools to stop unfair pricing that drives up grocery bills for American families and hurts workers, farmers, and ranchers.”
Among other things, the FGFRA would make it unlawful for a major meatpacking conglomerate to control more than one major type of meat, forcing the biggest players to choose a line of business and impose hard caps on the concentration of beef markets at both the regional and national levels.
“Schumer’s bill and other efforts to villainize meat packers is simply reckless election year pandering that threatens to damage a crucial industry at the center of every American meal,” says Julie Anna Potts, Meat Institute President and CEO. “If the Senator is trying to make meat and poultry more affordable for consumers, this is the wrong approach. It will have the opposite effect. While this may be just a messaging bill to Senator Schumer, it is real life for American families, farmers and ranchers and for the 3.2 million Americans employed throughout the industry.”