Current Cattle Market Daily Headlines for November 27, 2020

by | Nov 27, 2020 | 0 comments

Priciest cows ever are squeezing meatpackers in Brazil beef boom

  • For some time now, Brazil has been experiencing a beef boom, but it seems as if that boom might’ve hit its peak.
  • Brazilian beef exports are surging thanks to a weakening currency that has boosted the appeal of Brazilian shipments.
    • The majority of these exports are heading to China.
  • Tremendous exports have been a positive for Brazil’s cattle industry, but the country is now seeing their cattle supplies shrink and packers are being forced to pay 50 percent more for cattle as prices reach record highs.
    • The industry is having a difficult time passing those higher costs onto Brazilian consumers, and margins have begun to erode.
  • Even though exports to China have propped up earnings for JBS SA and Marfrig Global Foods SA, both companies have seen narrower margins this year than what they experienced in 2019, according to Cesar de Castro Alves, agribusiness consultant at Itau BBA.
  • Wesley Batista, JBS South America’s head, stated earlier this month that Brazilian beef operations have been challenging due to low cattle supplies.
    • In the third quarter, JBS beef margins in Brazil fell to 7.5 percent from 13.8 percent in the previous quarter.
      • To offset higher cattle prices, the company has increased prices in the Brazilian and export markets.


President-elect Biden’s EPA could bring major agriculture changes

  • As president-elect Joe Biden fills his Cabinet, many are wondering whom he will appoint as EPA administrator.
  • According to Randy Russell, president of the Russell Group and an agricultural lobbyist, Biden’s EPA transition team seems to be much more progressive and driven by activists. He believes that the EPA will pose many more issues for the agriculture community going forward.
  • A couple names that have been brought to the table for the position of EPA administrator are Mary Nichols and Jay Inslee.
    • Mary is the chair of the California Air Resources Board and previously served as a senior staff attorney for the Natural Resources Defense Council. She has also spent 45 years serving as an environmental lawyer.
    • Jay Inslee is the Governor of Washington and holds a strong focus on the climate.
  • President Trump’s EPA withdrew the Obama Administration’s “waters of the U.S.” (WOTUS) rule and by June 22nd of this year, Trump’s Navigable Waters Rule took affect.
    • Russell believes it would be best for the Biden Administration to not try to revert back to Obama’s WOTUS rule or anything along those lines. He said that such a move would irritate the agriculture industry “at a time when they don’t need to pick that fight.”
  • Even though Biden isn’t expected to eliminate the recently approved dicamba registration, the Center for Food Safety (CFS) has called on the Biden administration to take immediate action in its first 180 days to halt or revoke EPA’s re-approvals of glyphosate, dicamba, sulfloxaflor, atrazine and isoxaflutole.
  • Various food and agricultural activities that would usually be subject to environmental review under the National Environmental Protection Act (NEPA) are now exempt or only subject to lessened scrutiny under a Trump Administration rule.
    • However with a new EPA, the Center for Food Safety is asking for the previous NEPA protections to be restored.
    • CFS also wants to restore how the Endangered Species Act is applied, another change that the Trump Administration made.


Boxed beef prices

  • Choice boxed beef: $245.06 (+0.76)
  • Select boxed beef: $220.90 (+1.19)


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From the Holcomb Tyson fire to COVID-19;
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