Profit Tracker: growing packer/feeder margin spread

www.drovers.com/markets/profit-tracker/profit-tracker-growing-packer/feeder-margin-spread

• Last week, beef packer margins increased $83/hd. to $387/hd., an increase of 20 percent from the week before.
  • Increased profit margins were mostly due to a brisk uptick in wholesale beef prices. For the most part, these increased beef prices did nothing for fed cattle prices.
    • For the same week last year, packers saw profits of $73/hd., $314 less than this year.
  • For the week ending January 29, average prices for fed steers were $112.28/cwt., which resulted in average feeding margins of $47/hd.
    • For the same week last year, feeders saw profits of $185/hd.
  • According to Sterling Beef Profit Tracker, the spread between packer and feedlot profits last week was $340.
  • The beef cutout average was $229/cwt., $11/cwt. higher than the week before.
    • The cutout was also $16/cwt. higher than the same week in 2020, but fed cattle prices were $10/cwt. lower for the same week one year ago.
  • John Nalivka, Sterling Marketing president, forecasts 2021 cash profit margins for cow-calf producers to average $123/cow. He projects an average profit of $43/hd. for feedyards in 2021 and he expects packer margins to average $251/hd.

McDonald’s quietly rolls out McPlant burger in test markets;

https://www.detroitnews.com/story/business/2021/02/01/mcdonalds-quietly-rolls-out-mcplant-burger-test-markets/4344091001/

• McDonald’s has begun testing the waters with their McPlant burger as they have started selling the sandwich in Denmark and Sweden.
  • The fast-food giant began selling the McPlant burger at select locations in January in hopes of gaining insight into consumer interest before increasing sales at other locations.
    • The trial run at McDonald’s in Sweden is set to last until March 15 and sales in Demark will run through April 12.
  • McDonald’s came together with Beyond Meat Inc. to develop the McPlant, which is made from pea-based protein.
    • Along with those pea-based protein burgers, the McPlant comes with cheese, lettuce, tomato, pickles, onions, mayonnaise, mustard and ketchup.
  • McDonalds’ Chief Executive Officer, Chris Kempczinski, said that plant-based food options are “an ongoing consumer trend.” His company will be flexible going forward with the McPlant sandwich offering it as a burger, a chicken item or a breakfast sandwich.

Lawsuit says Tyson Foods misled shareholders about Covid-19 protocols

https://www.drovers.com/news/industry/lawsuit-says-tyson-foods-misled-shareholders-about-covid-19-protocols

• On Tuesday, Tyson Foods Inc. was sued for allegedly defrauding shareholders and misleading disclosures about its ability to combat the spread of coronavirus in its packing plants.
• The lawsuit seeks class-action status and was filed in Brooklyn federal court by Mingxue Guo, who lives in Canada.
  • Guo seeks unspecified damages for Tyson shareholders from March 13 to December 15, 2020.
• This lawsuit comes after a letter was sent to the U.S. Securities and Exchange Commission on December 15 from New York City Comptroller Scott Stringer.
  • The letter asked the regulator to investigate Tyson’s health and safety disclosures to investors.
• On December 15, Tyson’s share price fell 2.2 percent and over the next five trading days the price fell 8.5 percent after Stringer accused the meat giant of “flagrantly misrepresenting its poor pandemic response” and requested the SEC examine if Tyson had truly been following federal safety guidelines.
• Gary Mickelson, Tyson spokesman, defended the company’s efforts during the pandemic, claiming that Tyson spend more than $500 million on employee safety.
• In his letter to the SEC, Stringer cited reports that Tyson had more than three times as many COVID-19 cases—11,087 as of December 3, and the company also had twice as many deaths as any other meatpacking company.

Boxed beef prices

www.nationalbeefwire.com

• Choice boxed beef: $234.25 (-1.03)
• Select boxed beef: $220.44 (-2.95)