2-9-18 5:19 PM EST | Email Article

TOP STORIES

 

Pricier Meat Could Have Its Limits -- Market Talk

09:51 ET - Tyson Foods' plan to raise prices on meat to offset higher freight costs could hit a wall, JPMorgan warns. The Arkansas protein supplier this week estimated an additional $200M in 2018 costs due to tight US trucking capacity and executives were confident the company could raise its prices to compensate, but JPMorgan isn't so sure. Much of the company's meat sales are commodity products priced mainly off supply and demand. Analysts warn that higher prices could erode demand for Tyson's prized brands, such as Jimmy Dean sausages and Ball Park hot dogs. (jacob.bunge@wsj.com; @jacobbunge)

 

New Worry for CEOs: Rising Costs From Metals to Meat

U.S. manufacturers and food companies are grappling with rising material and ingredient costs on top of pressure from higher wages -- a potential double whammy that could force them to raise prices or accept lower profit margins.

"We just see the inflation trends creeping in on many parts of our value chain," Whirlpool Corp. Chief Executive Marc Bitzer told analysts recently. The Michigan appliance giant projected that additional raw-material costs, driven by rising prices of steel and resin, would shave as much as $250 million off its profit this year.

 

STORIES OF INTEREST

 

Cattlemen Take on Lab-Grown Beef -- Market Talk

14:00 ET - Ranchers are locking horns with Silicon Valley. US Cattlemen's Association wants the USDA's food-safety service to restrict makers of plant-based or lab-grown meats from labeling their products as "beef." The petition comes after a number of high-profile investments by the likes of Tyson in startups working to develop alternatives to traditional slaughter-based meat. "Our members brought forth their concern with the labeling of products as 'meat' that are not in fact derived from bovine animals," said president Kenny Graner. "Labels must clearly distinguish that difference." Beef isn't the only animal product whose definition is in contention: Food producers have recently wrangled over the meaning of everything from milk to eggs. (benjamin.parkin@wsj.com; @b_parkyn)

  

Ag Groups Cheer Farm Belt Help in Budget Deal -- Market Talk

13:12 ET - Farm groups applaud provisions in the newly-inked budget deal that beef up the federal safety net for US cotton and dairy farmers, and help producers hit by natural disasters. The deal signed by President Trump includes a measure long sought by the cotton industry to make growers of the crop eligible for key government subsidies, as well as others aimed at improving what dairy producers argued was a broken support system. "Congress has taken important steps to address two of our biggest farm bill priorities," said Zippy Duvall, president of the American Farm Bureau Federation. Inclusion of the measures is expected to make passing the nation's next Farm Bill, the often-controversial legislation up for renewal this year, easier. (jesse.newman@wsj.com; @jessenewman13)

 

FUTURES MARKETS

 

Cattle Futures End Week Under Pressure

Cattle futures were mixed as traders waited for the week's physical cattle trade to start.

The absence of cash trade for slaughter-ready herds this week left market participants with fewer signals to trade with. But some meatpackers on Friday started to raise their bids, offering feedlots $126 per 100 pounds for their animals. That was up from $124, and steady with a week earlier. Feedlots, meanwhile, were asking for prices in the region of $130.

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - Feb 9 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
                                      * 
Feb  9       +$ 2.43             +$ 28.33 
Feb  8       +$ 7.87             +$ 34.39 
Feb  7       +$ 5.10             +$ 34.52 
 
* 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  109.4 
      (Percent of Year-Ago)     Select  109.1 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Friday fell $2.01 per hundred pounds, to $206.52, according to the USDA. Select-grade prices fell $1.05 per hundred pounds, to $202.74. The total load count was 133. Wholesale pork prices fell $2.82, to $73.58 a hundred pounds, based on Omaha, Neb., price quotes.

 

(END) Dow Jones Newswires

February 09, 2018 17:19 ET (22:19 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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