Negotiated cash fed cattle trade was at a standstill in all feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Last week, live sales were at $124/cwt. in the Texas Panhandle $123-$124 in Kansas, $125-$126 in Nebraska and $125 in the western Corn Belt. Dressed trade was at $200-$203.
Although seemingly plumb oversold, Cattle futures continued to melt down Tuesday. Many other commodity and equity markets suffered, too, as growing cases of the cover delta variant sap risk appetite. For Cattle, that’s on top of everything from cash market leverage woes to post-Labor Day demand uncertainty to the weekend announcement about atypical BSE confirmed in Brazil (see below).
Feeder Cattle futures closed an average of $2.20 lower.
Live Cattle futures closed an average of $1.29 lower, amid active trade.
Choice boxed beef cutout value was $1.23 lower Tuesday afternoon at $335.19/cwt. Select was $2.23 lower at $301.90.
Corn futures closed 10¢ to 13¢ lower through new-crop contracts and then mostly 2¢ to 6¢ lower.
Soybean futures closed mostly 10¢ to 14¢ lower.
Major U.S. financial indices closed lower Tuesday on follow-through pressure and worries about the impact of the covid variant on global economic growth.
The Dow Jones Industrial Average closed 269 points lower. The S&P 500 closed 15 points lower. The NASDAQ closed 11 points higher.
“Over the weekend, the Brazilian Ministry of Agriculture, Livestock, and Food Supply confirmed two atypical cases of BSE (bovine spongiform encephalopathy). Atypical cases are very rare and are believed to occur spontaneously. These cases occurred outside the United States and do not pose a risk to American consumers—U.S. beef is safe,” according to Colin Woodall, CEO of the National Cattlemen’s Beef Association (NCBA).
You might recall that USDA prohibited importing fresh Brazilian beef into the U.S. in 2017, based on persistent food safety concerns. The ban was lifted in 2020 after Brazilian exporters demonstrated the ability and willingness to meet U.S. protocols.
“Given Brazil’s history of failing to report BSE cases in a timely manner, we must remain vigilant in enforcing our safeguards and holding them accountable,” Woodall says. “The U.S. has the highest animal health and food safety standards in the world. We must make sure that all countries wishing to export beef to the U.S. continue to meet our standards—even a country with a small footprint like Brazil. We have full faith and confidence in the abilities of the U.S. Department of Agriculture (USDA) and Office of the U.S. Trade Representative (USTR) to enforce our safety standards and trade rules to protect America’s cattle producers and consumers.”
U.S. beef exports set another new value record in July, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). July beef exports were 45% more than the previous year at $939.1 million. Beef export volume was the third largest of the post-BSE era at 122,743 metric tons (mt), up 14% year-over-year.
“Beef exports were really outstanding in July, especially with COVID-related challenges still impacting global foodservice as well as persistent obstacles in shipping and logistics,” says USMEF President and CEO Dan Halstrom. “Retail demand continues to be tremendous, as evidenced by the new beef value record.”
July beef exports to the mainstay Asian markets of Japan, South Korea and Taiwan were relatively steady with last year, but at significantly higher value. Record-large shipments to China and a strong year-over-year rebound in Western Hemisphere markets drove export volume growth.
For January through July, U.S. beef exports increased 18% from a year ago to 822,830 mt, with value up 30% to $5.58 billion. Compared to the pace established in 2018, the record year for U.S. beef exports, shipments were up 6% in volume and 17% in value.
July beef export value equated to $425.68 per head of fed slaughter, up 52% from a year ago. Through July, export value was $369.15 per head, up 24%.
Pork exports in July were steady with last year at 221,809 mt, but export value jumped 20% to $657.3 million. Pork variety meat exports were especially strong at 49,092 mt, up 54% from the low total posted a year ago and 16% above July 2019. Variety meat export value was the second highest on record at $116.7 million, up 69% from a year ago and 39% above 2019.