Cattle margins slip, hogs in the black
- Cattle traded more than $1 higher last week, but increasing feed costs erased some of the meek profits found on average feed yard closeouts.
- For the week ending February 5, according to Sterling Beef Profit Tracker, cattle feeding margins declined $23/hd. to an average of $25/hd.
- Total cost for finishing a steer has climbed to $1,519, approximately $14 higher than last year at this time.
- Even though we saw higher bids for cash cattle, packer profit margins increased $3 to $392/hd.
- The beef cutout price increased $4/cwt., up to $233.71/cwt. As a result, the packer/feeder margin spread is now $367/hd.
- Meatpacker leverage is obvious with cash cattle prices down $7/cwt. compared to the same week one year ago, but the beef cutout price is $23/cwt. higher than 2020.
- For the same week one year ago, packers saw profits of $77/hd., while feeding margins were $143/hd.
Growing America; new pains
- Last week, the $30 billion Commodity Credit Corporation (CCC) fund that Trump used to aid farmers suffering from trade wars was taken away from farmers and reallocated for climate change and restaurants.
- The CCC is a Depression-era financial institution that was created in 1933 and reincorporated in 1948 as a Federal corporation within the Department of Agriculture by the Commodity Credit Corporation Charter Act.
- While serving as Secretary of Agriculture, Sonny Perdue used the CCC fund to help producers that were struggling financially because of retaliatory tariffs, accounting for 40 percent of farm income in 2020.
- President Biden now plans to use this fund to take on climate change, support restaurants and kick start other programs without having to wait for Congress’ approval.
- On top of this, Biden plans to increase the capital gains tax to 39.6 percent and do away with stepped-up basis.
- Wanda Patsche, with Minnesota Living said that these tax changes that Biden plans to make are heartbreaking because so many agriculture producers have spent their whole lives building their operations, and now the government wants such a large portion when a farmer or rancher passes.
Animal rights group targets Costco poultry farm in Nebraska
- Mercy for Animals, an animal rights group, released a video on their website this past weekend of what it claims are “cruel practices” at a Costco-affiliated poultry farm in Nebraska.
- Unknowingly, an undercover investigator for the animal rights group was able to gain entry into an unidentified poultry operation in Nebraska that supplies broiler chickens to Lincoln Premium poultry.
- Lincoln Premium poultry owns a processing plant in Fremont, NE that supplies tens of millions of chickens to Costco annually.
- The video showed large chickens that had fallen onto their backs, not able to get up because of their weight, open wounds on chickens, ammonia burns, broken bones, twisted necks and beaks and large piles of dead birds outside the poultry barns.
- In response to the video, Lincoln Premium Poultry spokeswoman Jessica Kolterman, stated that what was put out to the public is “normal, uneventful livestock activity.”
- She said that the video focuses on the “underbelly of the livestock industry,” instead of showing how the chickens are raised in climate-controlled barns that protect them from the elements and predators.
U.S. beef exports down 2 percent in 2020
- The U.S. exported 2.96 billion pounds of beef in 2020, down 2.3 percent from 2019.
- Exports found their way to 123 different countries in 2020.
- Japan was the top destination for U.S. beef, importing almost 829 million pounds.
- This was an increase of 3.71 percent from 2019.
- Following Japan was South Korea, Mexico, Canada and finally Honk Kong rounding out the top five importers.