LIVESTOCK HIGHLIGHTS: Top Stories of the Day

05/17/19 05:24 PM EDT

TOP STORIES

 

Metal Tariff Lift Consequential for US Pork -- Market Talk

15:02 ET - The lifting of the 25% tariff on steel imports and 10% on aluminum imports imposed on Canada and Mexico by the US last year is expected to affect the US meat markets greatly--particularly pork. According to the National Pork Producers Council, Canada and Mexico took over 40% of the pork exported from the US, making retaliatory tariffs placed on US pork by Mexico even more damaging. "Mexico's 20% retaliatory tariff on US pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis," says David Herring, president of the NPPC. "Removing the metal tariffs restores zero-tariff trade to US pork's largest export market and allows NPPC to focus more resources on working toward ratification of the US-Mexico-Canada Agreement." (kirk.maltais@wsj.com, @kirkmaltais)

 

Japan Lifts Restrictions on U.S. Beef as Hog Disease Rips Through Asia

U.S. beef producers will now have unfettered access to sell in Japan, in a move that some experts see as a preemptive move to mitigate a meat shortage if disease continues to decimate Asian pig herds.

In a statement Friday, the U.S. Department of Agriculture confirmed that the U.S. and Japan agreed on terms that eliminate a Japanese ban on U.S. beef implemented in 2003 in reaction to mad cow disease detected in the U.S.

 

STORIES OF INTEREST

 

U.S. Farmers, Wanting a Trade Deal, Brace for Aid Package They Fear Will Fall Short

Stalled trade talks between Beijing and Washington are exacerbating a slump in the U.S. Farm Belt, and many farmers don't believe an aid package being assembled by the Trump administration will be enough to compensate for the economic damage.

Agriculture has been among the U.S. economic sectors hit hardest by the yearlong trade conflict with China. Now that a deal has slipped from the grasp of negotiators, farmers are facing the likelihood that the deepest downturn in the agricultural economy since the 1980s could be prolonged.

 

Beyond Meat Can Handle a 'Pea Bubble.' Just Remember the Story of Ethanol and Corn. -- Barrons.com

The successful initial public offering of Beyond Meat indicates investors believe people are going to eat a lot of faux meat. That could spell trouble for shareholders if the supply of vegetable protein can't keep up with demand.

Profit margins for Beyond Meat (ticker: BYND) and its competitors could shrink like a burger on a griddle if pea prices skyrocket. History tells us how the " pea bubble" will play out, if it comes to that.

 

Beefless Burgers a Threat to Meat Stocks? That's Fake Moos, Folks -- Barrons.com

Please don't call me a hero. Save that for first-responders. I'm just a regular guy who drove 35 minutes to a Red Robin to taste a new burger made from soy and potato proteins, coconut and sunflower oils, and a blood substitute derived from genetically engineered yeast. I wanted to figure out whether Barron's readers with Big Beef shares should be nervous.

Breathe easy, carnivestors. In fact, Credit Suisse this past week pounded the table on one veteran of the beef, pork, and chicken trade. It's now dabbling in plant-based alternatives -- more on that in a moment. First, let's acknowledge the real progress being made in fake meat.

 

FUTURES MARKETS

 

Livestock Finishes Higher in Big Day for Global Trade -- Market Talk

15:05 ET - Both June live cattle and lean hog contracts finish higher as the US made two big advancements in global trade today--one, to lift long-standing restrictions on exports of US beef to Japan, and two, President Trump confirms that an agreement had been made to remove metal tariffs on Canada and Mexico, easing a major stumbling block for USMCA passage. Both developments are expected to help boost the amount of US pork and beef exported for sale. News of the Japanese deal supported cattle futures, which closed up 0.7% at $1.11275 per pound. Meanwhile, the late-day news about the metal tariffs, which would potentially bolster USMCA prospects, were only able to nudge hog futures into the black, with the contract finishing up 0.2% at 92.375 cents per pound. (kirk.maltais@wsj.com, @kirkmaltais)

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 17 
 
Source: USDA, based on Wall Street Journal calculations 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
May 17       -$  3.01            +$ 50.54 
May 16       -$  3.85            +$ 53.23 
May 15       -$  0.49            +$ 53.12 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                 Beef 
          For Today             Choice   94.7 
      (Percent of Year-Ago)     Select  100.0 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Friday rose 75 cents per hundred pounds, to $220.31, according to the USDA. Select-grade prices rose 40 cents per hundred pounds, to $208.28. The total load count was 109. Wholesale pork prices fell $1.25, to $83.91 a hundred pounds, based on Omaha, Neb., price quotes.

 

(END) Dow Jones Newswires

May 17, 2019 17:24 ET (21:24 GMT)

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