In this file:
· CME: Fed Cattle Futures Continue to Lose Ground; Will Brazil BSE Case Affect US Cattle Prices?
… China beef imports in April jumped 75 percent...
· Mad cow discovery in Brazil has immediate effect on exports
… China accounts for about 20 percent of Brazil’s beef exports…
CME: Fed Cattle Futures Continue to Lose Ground; Will Brazil BSE Case Affect US Cattle Prices?
via The Cattle Site - 05 June 2019
US - Fed cattle futures continued to lose ground on Monday, as market participants worry about the broader macro trends and the potential impact this may have on beef/cattle market down the road, Steiner Consulting Group, DLR Division, Inc. reports.
Beef business so far has also been disappointing and there is some concern that turning around beef sales will take longer than some expect. There is still a fairly large number of managed money longs in the market and attempts to get out of those positions could put some pressure, especially if fundamentals start to erode in the second half of June.
The choice beef cutout has been steady to modestly higher in the last two weeks and about 2 percent lower than the previous year. The main disappointment in the market has been the performance of the loin and rib primals. On Monday night, the value of the loin primal was quoted at $304.24/cwt, $34 or 10 percent lower than the previous year.
Seasonally the value of the loin primal peaks in early June and then heads lower. Foodservice sales appear to have faltered, something that some distributors have also confirmed in public reports. Retail features have also struggled due to cool temps in heavily populated areas.
The steak and burger meals that were lost in late April and May cannot be made up and retailers are not keen to feature steaks in July and August. But current low prices, at least for some items, may be offering opportunities for end users to plan on doing more with beef later in the year. Forward sales of beef that will deliver three months or longer into the future are now double what they were a year ago.
But participants focusing on the short term are finding little to cheer. Packers, on the other hand, seem to have plenty of cattle to process and see no need to chase this market. They have more cattle purchased on a forward basis for June and July and the lack of wholesale price momentum further limits their incentive to pay up.
USDA reported some cattle were trading in Nebraska at $110/cwt. This is a bit early in the week to see cash trade develop but the big discount to last week’s cash price further adds to the negativity currently prevalent in the complex.
Will the recently announced BSE case in Brazil impact US cattle prices? Our guess is that the impact will be negligible but much will depend on how China responds to this. We mention China specifically because it is, by far, the biggest customer for Brazilian beef. China is not only the biggest beef buyer in the world, it has recently absorbed all the growth in exports from all major world exporting countries.
China beef imports in April jumped 75 percent...
more, including chart, graph
Mad cow discovery in Brazil has immediate effect on exports
Food Safety News by Marler Clark
June 5, 2019
Brazil officially reopened it’s market to fresh American beef in August 2016 because of the United States’ classification by the World Organization for Animal Health (OIE) as a negligible risk country for BSE.
But now Brazil has a BSE problem of its own. A cow found in Mato Grosso state has the disorder, which is also known as mad cow disease. People can become infected from eating meat from infected animals.
Bovine spongiform encephalopathy or BSE is a progressive neurological disorder of cattle that results from infection by an unusual transmissible agent called a prion, according to the federal Centers for Disease Control and Prevention in Atlanta.
BSE is not entirely understood, and it is always fatal.
The Brazilian Agriculture Ministry has confirmed the discovery of a case of “atypical” BSE in a 17-year-old cow on Friday, May 31. After securing the necessary materials for tests, it says the cow carcass was incinerated. The Agriculture Ministry said no part of the animal entered the food chain, and there are no risks for the population.
Shipments of beef have been temporarily suspended in compliance with quarantine and sanitary protocols between Brazil and China. Beef shipments after May 30 must be returned to producers or redirected to other destinations.
Under their agreement, Brazil’s beef exports to China are suspended pending the review of the BSE case by Chinese authorities. A BSE case is considered “atypical” if the animal contracted the neurological disease spontaneously instead of through contaminated meat-and-bone meal.
China accounts for about 20 percent of Brazil’s beef exports.
While Brazil is also considered a “negligible risk” country for BSE, this is only the latest in a string of difficulties for the South American nation’s beef industry. It’s been only two years since its food safety protocols led to numerous shipments being canceled after a national bribery scandal.
CDC reports that BSE surveillance since 1993 has identified 26 cases in North America: Six BSE cases were in the United States and 20 in Canada. Of the six cases identified in the United States, one was born in Canada. One of the 20 cases identified in Canada was imported from the United Kingdom...