Negotiated cash fed cattle prices continued to gain last week amid aggressive cattle slaughter, resilient beef demand, and narrowing supplies.
For the week, live prices were $2 higher in the Southern Plains at $150/cwt., $1-$2 higher in Nebraska at $152-$153 and $1-$3 higher in the western Corn Belt at $151-$153. Dressed prices were $4 higher in Nebraska at $240 and $4-$8 higher in the western Corn Belt at $240.
Choice Boxed beef cutout value was 77¢ higher Friday afternoon at $263.26/cwt. Select was $2.58 higher at $234.49/cwt.
Cattle futures closed narrowly mixed to marginally lower Friday with week-end positioning and traders apparently reluctant to advance prices.
Feeder Cattle futures closed narrowly mixed from an average of 12¢ lower to an average of 11¢ higher.
Live Cattle futures closed an average of 44¢ lower (22¢ lower at the back to $1.02 lower in nearly-spent spot Oct).
Estimated total cattle slaughter last week of 668,000 head was 5,000 head less than the previous week and on par with the same week last year. Year-to-date total estimated cattle slaughter of 28.04 million head was 436,000 head more (+1.6%) than the same period last year. Year-to-date beef production of 23.13 billion lbs. was 320.9 million lbs. more (+1.4%).
Corn futures closed mostly fractionally lower to 1¢ lower.
Soybean futures closed mostly 6¢ to 9¢ higher.
Major U.S. financial indices rallied higher Friday with more data suggesting inflation is easing. Excluding food and energy, the Personal Consumption Index (PCE) increased 0.5% month over month and 5.1% year over year, which was in line with expectations.
The Dow Jones Industrial Average closed 828 points higher. The S&P 500 closed 93 points higher. The NASDAQ was up 309 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.18 to $1.26 lower higher through the front six contracts.
First the pandemic and then the onslaught of consumer price inflation continue to disrupt what were once fairly predictable consumer eating behaviors according to the latest Eating Patterns in America from the NPD Group (NPD).
“The rate of change in U.S. consumers’ eating behaviors continues at a dizzying pace,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Anyone hoping to return to normal must understand that there is no normal, only an ongoing evolution as we respond to new realities.”
Portalatin points to six macro themes currently shaping the new realities of food and beverage consumption behaviors: economic transition, inflation, income bifurcation, sticky behaviors, total wellness, and the return to convenience.
Economic transition: Consumer spending in 2020 and 2021 experienced a stimulus-fueled surge that extended into the first quarter of 2022. But, the spending spree ended by the second quarter when stimulus money dried up, and inflation and economic uncertainty took hold. The positive and negative disruptions of the past few years may mean year-over-year economic metrics aren’t as straightforward as they’d ordinarily be in explaining the consumer’s health.
Inflation: Consumers are unlikely to reduce food and beverage consumption in the face of inflationary pressure. But, they will find ways to manage and allocate their food dollars. While inflation is more moderate for food away from home than food at home, the typical restaurant meal costs 3.4 times more than in-home food sourced from retail. To offset rising food costs, consumers are bargain-hunting when grocery shopping, eating more meals at home, and cutting back on restaurant visits.
Income bifurcation: One of the key themes currently shaping the food and beverage landscape is the difference in behaviors among income groups. Trends of upper- and lower-income consumers are starkly divergent. In the food and beverage industry, income bifurcation has profound implications for the total share of stomach trends, retailer and restaurant choice, dealing and promotions, and brands vs. private labels.
Sticky behaviors: Many eating behaviors adopted during the pandemic reflect a rapid acceleration of behaviors established long before the pandemic, like consumers eating most meals at home. Food and beverage behaviors may continue to “normalize,” but the consumer landscape has been transformed as consumers created new capacities and restaurant operators expanded capabilities to serve a more home-centric consumer.
Total wellness: Due to the pandemic, consumers are finding a balance between foods that contribute to physical wellbeing and those that serve more emotional needs. They’re increasingly in tune with the functional attributes of various foods and beverages that can contribute to both sides of this equation.
Return to convenience: Back to school and work create time pressures for home cooks and foodservice customers. And while home-centricity remains more prevalent, the return of mobility reintroduced the need for speed and convenience. For some occasions, this means a trip to a quick service restaurant, but for others, we want to retain our new at-home capacity, just with some shortcuts or time-saving techniques.
“America’s eating patterns are shifting to adjust to new realities, and food manufacturers, foodservice operators, and retailers will need to adjust their offerings and services accordingly,” Portalatin says. “Although the one constant is change, there is a constant to count on, the U.S. consumer will always need to eat, and then it’s a matter of figuring out what, how, when, and where.”