Cattle Current Daily—May 11, 2020

Cattle Current Daily—May 11, 2020

Negotiated cash fed cattle trade ended the week on a decidedly upbeat note. Live sales in the Southern Plains were at $115/cwt., which was $5 more than earlier in the week and $10-$20 higher than the previous week. Live sales in Nebraska were $19-$20 higher than the previous week at $114-$115. Live sales in the western Corn Belt were mainly $3-$10 higher than the previous week at mostly $103; dressed sales there were $20-$30 higher at mostly $180.

Cattle futures closed lower Friday on likely profit taking, but still significantly higher week to week.

Live Cattle futures closed an average of 84¢ lower to an average of 44¢ higher.

Feeder Cattle futures closed an average of 95¢ lower (65¢ lower to $2.37 lower in spot May).

Choice boxed beef cutout value was $2.34 higher Friday afternoon at $460.88/cwt. Select was 42¢ higher at $448.99.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 6¢ to 7¢ higher.

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Major U.S. financial indices closed higher again Friday, despite continued quantification of national unemployment caused by COVID-19.

The unemployment rate rose to 14.7% in April as total nonfarm payroll employment fell by 20.5 million, according to the U.S. Bureau of Labor Statistics (BLS) on Friday. The number of persons who usually work full time declined by 15.0 million. The number who usually work part time declined by 7.4 million.

In April, average hourly earnings for all employees on private nonfarm payrolls increased by $1.34 to $30.01. The increase mostly reflects the substantial job loss among lower-paid workers, according to BLS.

The Dow Jones Industrial Average closed 455 points higher. The S&P 500 closed 48 points higher. The NASDAQ closed 141 points higher.

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“Soon, U.S. consumers will begin to see in their local meat case the effects of the beef and pork plant shut downs in April, with potentially 30% less meat on shelves and prices up to 20% above last year,” according to a new report from CoBank’s Knowledge Exchange Division: Closed Meat Cases Today Mean Empty Meat Cases this Summer. “For cattle and hog producers, the bottlenecks created by the plant slowdowns and shut downs have meant they will lose billions of dollars this year and be forced to euthanize millions of pigs. In spite of President Trump’s executive order to re-open the plants, per capita COVID-19 cases around U.S. meat plants have continued to climb, raising the risk of further plant capacity disruptions.”

Will Sawyer, lead animal protein economist with CoBank explains, “Margins for cattle and hog farmers have fallen to multi-year lows. As meat plants have closed, farmers are left with few options for their livestock, requiring herds to be culled. Shrinkage in the U.S. livestock herd will likely make the food supply shortage more acute later in the year.”

He pegs current pork and beef production approximately 35% less than the same time last year, likely assuring retail shortages and price inflation.

“Grocery stores are likely already rationing their current meat supplies and will likely draw on meat supplies in cold storage over the next month. The supply chain and inventory from the meat plant to local grocery store meat cases is less than a few weeks,” Sawyer says.

Key points from the CoBank report include:

  • The spread of COVID-19 among people who work in many beef and pork plants across the country has led to plant slowdowns and shut downs, creating a bottleneck in the U.S. meat and livestock supply chain.
  • Meat supplies for retail grocery stores could shrink by nearly 30% this Memorial Day, leading to retail pork and beef price inflation as high as 20% relative to prices last year.
  • As livestock prices have been collapsing, industry associations predict 2020 losses at $13.6 billion for U.S. cattle producers (NCBA) and nearly $5 billion for U.S. hog producers (NPPC).
  • While we expect pork processing to pick up in the coming weeks, U.S. hog producers may still be forced to euthanize as many as 7 million pigs in thesecond quarter alone, worth nearly $700 million at historical average prices. This would further diminish meat supplies this fall and add to the billions of dollars of losses from lower livestock prices.
  • President Trump’s executive order to reopen closed meat plants, announced April 28, could help stem the tide of additional plant closures and pave the way for closed plants to reopen. However, attracting workers to fill the thousands of vacant positions at meat plants across the U.S. is still an issue.
2020-05-09T18:15:08-05:00

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This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

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This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.