Current Cattle Market Daily Headlines for Monday, October 19, 2020

by | Oct 19, 2020 | 0 comments

Cattle market’s bottom is in, Nalivka says

  • According to Sterling Marketing president John Nalivka, 2020 will be the low for calf prices and cow-calf profitability as he expects better days in the future.
  • Cow calf producers saw respectable profits in 2014 and 2015, but when we compare 2020 to those years, cow calf profits are down 80 percent.
  • Nalivka feels that the next two to three years look to be fairly profitable for cow calf producers and feedyards will most likely also see improved profitability.
    • Going into the early months of 2021, Nalivka expects cash fed cattle to trade somewhere around $118/cwt. to the upper $120’s. He figures breakevens will range from $112/cwt. to $116/cwt.
  • Covid-19 caused obvious disruptions in the cattle industry, but Nalivka believes we are finally getting past the backlog of cattle that was created last spring when packers had issues getting cattle processed.
    • The packing industry’s response to the pandemic was phenomenal as they spent billions of dollars to address Covid-19, he said.
  • Nalivka concluded by stating that it is important to remember that most packers are producing value-added products, and with the increase in quality of fed cattle they are receiving, they will of course have better margins. The entire industry has moved ahead with better quality to address what the consumer wants.


Federal appeals court props up California’s animal cruelty law

  • Last week, a panel of judges in the Ninth Circuit Court of Appeals upheld a federal district court’s ruling that meat producers selling their products in California must comply with the state’s animal cruelty law.
  • In 2012, California’s voters approved Proposition 12, the Prevention of Cruelty to Farm Animals Act.
    • This law restricts the sale of meat and eggs from producers who don’t meet the standards of providing 43 square feet of floor space for calves, 24 square feet for pigs and more than 1 foot for hens.
  • Last year, the North American Meat Institute (NAMI) sued claiming that Prop 12 violated the commerce clause of the U.S. Constitution by creating a trade barrier. NAMI also argued that a California law shouldn’t affect meat producers outside of the state.
    • Regardless, U.S. District Judge Christina Snyder rejected NAMI’s request for an injunction.
      • The Ninth Circuit panel sided with Judge Snyder claiming that the proposition “does not have a discriminatory purpose given the lack of evidence that the state had a protectionist intent.”
    • NAMI is currently reviewing their options before moving forward to fight the law.
    • The National Pork Producers Council and the American Farm Bureau Federation also sued California over Prop 12, but the suit was dismissed in April.


Farmer speaks out following harvest equipment fire in Clay County, NE

  • Early on Thursday morning as Jonathan Rempel was getting his two children ready for school, he received a call from the Sutton Volunteer Fire Department who informed him that all of his harvest equipment was on fire.
    • According to the Nebraska State Fire Marshal’s office, the fire destroyed a combine, two trucks and trailers filled with grain, a tractor and a grain cart.
  • The fire occurred in rural Clay County, NE, about two miles off the highway.
  • Since the fire, photos of the harvest equipment have gone viral on social media with the suggestion that the fire was politically driven and arson.
    • Rempel did have two flags in support of President Donald Trump on his combine.
  • In a statement made on Facebook by Rempel, he said that his harvest equipment was parked at a safe distance from each other. The enormous loss is devastating, but he and his family are incredibly blessed to live in rural America, as the outpouring of support has been colossal.
  • An investigation is currently being conducted by the Fire Marshal’s office.


Beef exports and sales

  • Net sales of 13,400 metric tons reported for 2020 were down 35 percent from the previous week and 31 percent from the prior four-week average.
  • Exports of 16,200 metric tons were down 5 percent from the previous week and 1 percent from the prior 4-week average.


Boxed beef price

  • Choice boxed beef: $210.03 (-0.45)
  • Select boxed beef: $193.52 (-2.98)



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How did we get here?

From the Holcomb Tyson fire to COVID-19;
Click to see a timeline of events that have brought to light the profit and pricing disparity in cattle markets.


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