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Dean Foods Drops as Milk Struggles Deepen
The milk business is shaking Dean Foods Co.
The top U.S. milk processor by sales has been struggling amid slowing milk sales and rising costs. Now its largest customer, Wal-Mart Stores Inc., is preparing to open its own milk-processing plant, reducing its reliance on Dean. The Texas-based milk supplier on Tuesday nearly halved its per-share profit expectations for 2017.
Wal-Mart Milk Move Adds Pressure to Dean Foods -- Market Talk
09:58 ET - Wal-Mart (WMT), one of Dean Foods' (DF) biggest buyers of milk, represents one of its biggest challenges. The retail behemoth will shortly open its own milk processing plant in Indiana, a move that Dean estimates will cost the Texas-based milk supplier about 90M to 95M gallons' worth of sales per year. WMT announced the plans several years ago and Dean has said the business is low-margin private-label milk, but the timing is tough for Dean. While the company's been planning for the shift, recent downdrafts in fluid milk volume and profit margins mean Dean may not be able to cut costs and adjust its operations fast enough to offset the WMT volume loss, according to CEO Ralph Scozzafava. (firstname.lastname@example.org; @jacobbunge)
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US Temperatures Running Hot This Year -- Market Talk
13:40 ET - In news of note for agricultural suppliers and utility managers, federal climate analysts say the US continues to run hotter than average, at a pace that puts 2017 to date among the warmest in 123 years of record-keeping. In a regular assessment of US climate trends, they report above-average temperatures across the nation in the first seven months of 2017. Sections of the Northwest are running cooler than average so far, but warmer in the Southwest and the Rockies through to the East Coast due to record and near-record warmth earlier in the year. Florida, North Carolina and South Carolina had their warmest January-July on record, they say. (email@example.com; @leHotz)
Cattle Supply Continues Pressuring Futures
Cattle futures fell for a second consecutive day as concerns over large supply continued to weigh down prices.
Contracts for cattle swung back and forth Tuesday, initially rising before giving back gains. Analysts said the path of least resistance was lower, though on a technical level, prices were stuck in a trading band.
Zumbrota, Minn Hog Steady At $51.00 - Aug 8
Barrow and gilt prices at the Zumbrota, Minn., livestock market today are steady at $51.00 per hundredweight.
Sow prices are steady. Sows weighing under 450 pounds are $65.00-$67.00, 400-450 pounds are at $65.000-$67.00, 450-500 pounds are $65.00-$67.00 and those over 500 pounds are $68.00-$71.00.
The day's total run is estimated at 100 head.
Prices are provided by the Central Livestock Association.
Estimated U.S. Pork Packer Margin Index - Aug 8
This report reflects U.S. pork packer processing margins. The margin indices
are calculated using current cash hog or carcass values and wholesale pork
cutout values and may not reflect actual margins at the plants. These
estimates reflect the general health of the industry and are not meant to
be indicative of any particular company or plant.
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 -
Aug 8 +$24.75 +$ 73.70
Aug 7 +$30.83 +$ 78.68
Aug 4 +$26.40 +$ 75.11
* 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.
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
For Today Choice 101.6
(Percent of Year-Ago) Select 103.5
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Tuesday fell 47 cents per hundred pounds, to $202.25, according to the USDA. Select-grade prices fell 14 cents per hundred pounds, to $196.86. The total load count was 149. Wholesale pork prices fell $2.32, to $94.68 a hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
August 08, 2017 17:50 ET (21:50 GMT)