Cattle futures finished marginally mixed on Friday, following strong pressure early on. Cash markets offered no direction as negotiated fed cattle trade remained undeveloped through Friday afternoon.
Live Cattle futures closed unchanged to an average of 12¢ higher, except for 5¢ lower in Apr.
Except for 45¢ higher in the back contract, Feeder Cattle futures closed an average of 28¢ lower.
Choice boxed beef cutout value was 10¢ lower Friday afternoon at $230.97/cwt. Select was 45¢ lower at $208.69. Select and Choice rib, round, and loin cuts sold steady to weak, according to the Agricultural Marketing Service. Chuck cuts traded steady to firm. Beef trimmings sold unevenly steady on light to moderate demand and offerings.
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Major U.S. financial indices closed on a mixed basis Friday, but finishing the week higher, supported by surging crude oil prices and positive quarterly earnings.
The Dow Jones Industrial Average closed 91 points higher. The S&P 500 closed 4 points higher. The NASDAQ closed 2 point lower.
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Farm income declined in the first quarter of this year for the 17th consecutive quarter, according to the latest Agricultural Finance Monitor (AFM) published by the Federal Reserve Bank of St. Louis. That’s for the Eighth District, which includes all or parts of seven Midwest and Mid-South states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
The majority of agricultural bankers (34 within the boundaries of the Eighth Federal Reserve District) continue to report declines in farm income relative to a year earlier.
More specifically, bankers attribute part of declining income to diversification and consolidation.
On the one hand, according to a Missouri lender, “In the past, producers sought off-farm income to bridge cash flow shortages. Today, larger producers are seeking to diversify (excavating, construction, trucking, and new livestock confinement) to provide additional income by using existing equipment and labor.”
On the other hand is consolidation borne by producer retirement.
“Older farmers are discontinuing operations at a fast pace to secure equity for retirement,” explained the same lender. “Few farmers and their bankers are interested in acquiring land due to really tight cash flow coverage ratios. Few producers start up in agriculture unless ushered in by a retiring producer.”
Quality farmland values fell 1.4% in the Eighth Federal Reserve District during the first quarter, compared to the same quarter last year. Cash rents for quality farmland declined 0.5%.
Pasture was a different story.
First-quarter ranchland or pastureland values increased 13.0% compared to the previous year. Cash rent for ranchland or pastureland increased 12.6%.