Current Cattle Market Daily Headlines for February 19, 2021

by | Feb 19, 2021 | 0 comments

Winter storm Uri batters agriculture supply chain

  • During a Feedstuffs 365 live stream, panelists explained that Texas has been hit the worst by the most recent winter storm that made its way across the U.S. this week.
    • But other key agricultural regions are suffering from logistical and operating issues, as well as energy issues.
      • There is no doubt that both the hog and cattle supply chains are experiencing numerous setbacks and delays because of the dangerous cold, ice and snow.
    • According to Dennis Smith, a commodity broker for Archer Financial, cattle slaughter will most likely drop 40,000 head this week because of the winter storm.
      • Most of the processing issues are occurring in Texas, but there are a few plants in Kansas that are also being idled, shut down or slowed.
    • Smith said that from an energy standpoint and a slaughter standpoint, animals are backing up.
      • These slaughter and energy issues should be resolved by next week, but backlogs of both cattle and hogs will last for a couple weeks.
        • Packers are experiencing extremely profitable margins right now, so they have plenty of incentive to increase their Saturday kill.
      • Smith also said that hog and beef producers are most likely already seeing a reduced rate of gain and weight loss in their animals, along with increased production costs due to increased energy and feed needs.
      • According to Sanderson Farms, the company has as many as 200 broiler houses in Texas without power and experiencing generator failure. They also have 24 broiler houses that had ruptured or frozen water pipes and was without water.
      • Four broiler houses in Mississippi were destroyed after accumulated ice and snow caused their roofs to collapse.


Plant-based wagyu beef is coming to the U.S.

  • More than 4,000 sushi locations in North America will soon be serving plant-based wagyu beef.
  • Top Tier Foods, a Canadian manufacturer that focuses on plant-based sushi ingredients, and Advanced Fresh Concepts came together to develop the plant-based beef product.
    • Advanced Fresh Concepts is owned by Zensho holdings, one of Japan’s largest food service companies.
      • The company has more than 4,000 sushi locations in North America and operates Rouses Supermarkets, a grocery store chain in Louisiana.
    • The plant-based wagyu beef, which is called “waygu,” will be served in teriyaki strip form.
      • The fake beef product is a soy-based food that is made with ingredients such as soy sauce, rice wine, garlic paste and ginger


Profit Tracker: cattle, hog margins improve

  • According to the Sterling Beef Profit Tracker, cattle feeding margins improved $60 per head last week to an average of $85/hd.
    • One year ago, cattle feeders saw average profits of $160/hd.
  • Packer margins declined for the week ending February 12 by $22/hd. Despite this decline, packers are still seeing historically large profit margins at $367/hd.
    • These large profits have created quite the packer/feeder margin spread at $282/hd.
      • This spread is actually down $85 from the previous week’s $367.
    • The packers continue to hold significant leverage in the market with cash cattle prices being $5/cwt. lower than the same week a year ago, yet the beef cutout price is $22/cwt. higher than a year ago.


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How did we get here?

From the Holcomb Tyson fire to COVID-19;
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