Negotiated cash fed cattle trade was at a standstill in most regions through Tuesday afternoon, according to the Agricultural Marketing Service. In the Western Corn Belt, trading was mostly inactive on very light demand. Last week in the region, live sales traded from $125-$126/cwt. and dressed at $197/cwt.
The latest reported market in the Southern Plains was two weeks ago with live sales at $122/cwt.
On Monday in Nebraska, live sales traded at $126.50/cwt. and dressed sales at $197/cwt.
Cattle futures closed narrowly mixed Tuesday, able to fade some early pressure, but remained mired in uncertainty surrounding potential contract-end volatility (Live Cattle), limited cash trade last week, coupled with next week’s holiday and how Wednesday’s USDA Grain Stocks and Acreage reports will influence feed prices.
Live Cattle futures closed mixed with an average of 33¢ higher through the front three contracts then from 15¢ lower to 25¢ higher.
Feeder Cattle futures closed mixed, up an average of 64¢ higher in the front four contracts.
Choice boxed beef cutout value was $5.09 lower Tuesday afternoon at $292.34/cwt. Select was $3.56
Grain futures closed mainly narrowly mixed as traders awaited direction from the aforementioned USDA reports due out Wednesday.
Corn futures closed mostly 2¢ lower to 1¢ higher, except 19¢ higher in spot Jly.
Major U.S. financial indices were little changed on Tuesday.
The Dow Jones Industrial Average closed 9 points higher. The S&P 500 closed a point higher and the NASDAQ was up 28 points.
“Before trying to “fix” something it is prudent to look back and acknowledge the benefits that flow from the system as it exists,” says Mark Dopp, senior vice president of government affairs for the North American Meat Institute (Meat Institute). “In 2019, Americans spent an average of 9.5% of their disposable personal incomes on food—divided between food at home (4.9%) and food away from home (4.6%).
“Between 1960 and 1998, the share of disposable personal income spent on total food by Americans, on average, fell from 17.0% to 10.1%, driven by a declining share of income spent on food at home. Indeed, Americans spend less of their disposable personal income on food than any other country in the world. This remarkable drop is attributable largely to systemic efficiencies that allow food processors to offer food to consumers at lower prices.”
Dopp’s perspectives come from a letter submitted in response to a request by U.S. Agriculture Secretary Tom Vilsack for comments about efforts to improve supply chains for the production of agricultural commodities and food products.
In the letter, Dopp outlines some of the myths and misconceptions surrounding current debate and proposed legislation aimed at cattle markets. Some of that focuses on strained beef packing capacity, resulting in lost producer market leverage.
In written testimony to the U.S. Senate Agriculture Committee last week, Julie Anna Potts, Meat Institute President and CEO Julie Anna Potts pointed out publicly announced plans for beef packing capacity expansion would add more than 5,200 head per day capacity.
“These new entrants or company expansions were based on decisions to build or expand based on market conditions, not because of government intervention. Government interference into the market could well undermine this industry growth,” Potts says.
“Demands for more harvest capacity also ignore another fundamental issue: a significant, perhaps the biggest, problem facing the meatpacking industry is labor, or the shortage of it, “Dopp explained in his comments. “Labor challenges were not caused by the pandemic; COVID-19 only exacerbated the issue.”