LIVESTOCK HIGHLIGHTS: Top Stories of the Day
December 05 2019 - 5:34PM
Dow Jones News
TOP STORIES
Food Prices Hit Two-Year High on Meat, Vegetable-Oil Shortfalls
-- Market Talk
1051 GMT - Food prices have surged to their highest level in
more than two years, the UN's Food and Agriculture Organization
says, as the disease afflicting China's pig herd continues to drive
up meat and fish imports. Meat prices rose 4.6% in November from
October, the biggest one-month advance in more than 10 years,
reflecting "strong import demand, especially from China." Demand
for meat in meals at Christmas and Thanksgiving has exacerbated the
global meat shortfall, the FAO adds. Vegetable-oil prices rose even
more quickly--jumping 10% from October--as consumers sought to lock
in supplies ahead of possible shortages in 2020. Overall food
prices rose 2.7% in November from October, and were 9.5% higher
than a year earlier. (joe.wallace@wsj.com)
Burger King Plans More Than 100 New Canada Restaurants
>QSR
Restaurant Brands International Inc.'s (QSR.T, QSR) Burger King
unit Thursday said it plans to open 103 restaurants in Ontario and
Manitoba over the next five years, boosting the number of locations
in Canada by 25%.
Burger King said it has signed a new five-year expansion deal
with Redberry Restaurants, its long-time partner in Canada, to open
the new restaurants.
Kroger's Overhaul Crimps Profit Again -- Update
Kroger Co.'s investments in store renovations and technology
hurt profit again in its latest quarter, when the grocer tempered
its overhaul plans to boost future sales.
The Cincinnati-based chain on Thursday posted its fifth
consecutive profit decline for the quarter, a 17% decrease over
that period last year to $263 million. Kroger said profit at
pharmacies in its grocery stores fell due to pressure from the
spread of lower-margin generic drugs across the industry. The
company also said it expects to write down by $238 million the
value of the Lucky's Market natural grocer that it invested in
three years ago.
STORIES OF INTEREST
USDA to Embark on Seven Trade Missions in 2020 -- Market
Talk
1055 ET - Representatives for the USDA will engage in seven
agribusiness trade missions in 2020, in an effort to reach out to
areas of the world that could increase their consumption of US
agriculture, the agency's Foreign Agriculture Service says. The
missions will be led by Under Secretary for Trade and Foreign
Agricultural Affairs Ted McKinney, and will travel to North Africa
in March, the Philippines in April, Spain and Portugal in June, the
UK in September, Australia and New Zealand in October, Peru in
November, and the UAE in December. It's the most trade missions the
USDA has led in one year, says McKinney -- with four of the stops
being first-time destinations for USDA outreach.
(kirk.maltais@wsj.com; @kirkmaltais)
Retailers Watching Changes To Federal Food Aid Policy -- Market
Talk
11:20 ET - Analysts are trying to game out what the Trump
administration's move to tighten requirements for federal food aid
will mean for grocers and retailers that sell food. Kroger
executives say they are evaluating what changes to the program
could mean for business, describing it as a potential risk. Dollar
General, whose core customer earns a lower income, doesn't believe
the changes will have a material effect on its business next year.
"We continue to see a long-term trend of reduced benefits over
time," a Dollar General executive says. The administration plans to
curb the ability of states to shield adults who don't have
dependents from work requirements for assistance, WSJ reports. That
could make hundreds of thousands of people ineligible for food aid.
(micah.maidenberg@wsj.com; @MicahMaidenberg)
Deal-Making Could Add Upside for Mondelez, Bernstein Says --
Market Talk
1511 ET - Mondelez represents a solid standalone investment, but
adding deal-making to the equation could represent additional
upside, Bernstein says. If Mondelez sales momentum tapers off as it
faces tougher comps in FY20, that could attract renewed interest
from activist investors, who may push for a combination of Mondelez
and Pepsi's snack business, Bernstein says. "We believe that a
combination of Mondelez and Pepsi's snack business makes strategic
sense and would create a global snacking powerhouse," the analyst
says. Mondelez and Pepsi compete in somewhat complimentary
categories, suggesting there could be relatively limited anti-trust
issues, the Bernstein note says.(michael.dabaie@wsj.com)
FUTURES MARKETS
Cattle Turn Higher Despite Weak Export Report -- Market Talk
15:21 ET - Cattle futures on the CME finished 0.4% higher at
$1.246 per pound, putting an end to a recent losing streak for the
February contract. However, more selling may be on the way, as
recent drops in beef cutout prices suggest that packers may want to
bid the cattle contract lower to compensate. "Packers are going to
try to buy cattle cheaper as beef product prices have fallen out of
bed this week," says Jeff French of Top Third Ag Marketing.
Meanwhile, lean hog futures finished 1.2% lower at 67.575 cents per
pound, with traders reacting negatively to the USDA export sales
report, which showed that China had cancelled 8,500 metric tons of
pork already purchased for 2020 delivery. (kirk.maltais@wsj.com;
@kirkmaltais)
CASH MARKETS
Estimated U.S. Pork Packer Margin Index - Dec 5
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
Dec 5 +$ 68.80 +$ 44.03
Dec 4 +$ 67.85 +$ 41.55
Dec 3 +$ 69.90 +$ 42.15
* 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 105.8
(Percent of Year-Ago) Select 105.7
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Thursday fell $1.35 per
hundred pounds, to $225.60, according to the USDA. Select-grade
prices fell $2.19 per hundred pounds, to $208.12. The total load
count was 163. Wholesale pork prices rose $1.15, to $80.88 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
December 05, 2019 17:19 ET (22:19 GMT)
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