TOP STORIES

Higher Pork Prices Drag Hormel Foods' International Profit -- Market Talk

1014 ET - Profit in Hormel Foods' international and other segment fell 20% in 1Q, dragged by higher pork raw material costs for its business in countries such as Brazil, China, South Korea and the Philippines. Shares fall 5%. "Hogs purchased on the cutout formula were above last year and exceeded the spot market," Finance Chief James Sheehan says on a call with analysts. "Hogs purchased on market-based formulas were down from last year but not enough to offset the cutout formula and future contracted hogs." Sheehan also cites African swine fever as a drag on hog supply in China, Southeast Asia and Europe. (dave.sebastian@wsj.com; @depsebastian)

Coronavirus Could Dent Chinese Meat Purchases -- Market Talk

09:20 ET - Ripple effects from China's coronavirus epidemic could be felt in the US livestock sector, according to USDA's Chief Economist Robert Johansson. Speaking at an annual USDA forum in Washington, Johansson says the agency expects the virus' spread to result in less spending by Chinese consumers in early 2020, with potential reductions in higher value purchases like meat. Despite slower economic growth in China, USDA says US farmers this year can look forward to improved market access for their products globally, better weather and low interest rates as they continue to navigate a years-long downturn in the agricultural economy. (jesse.newman@wsj.com; @jessenewman13)

Chinese Purchases of US Ag Projected at $14B Without Phase One -- Market Talk

12:13 ET - The USDA is currently projecting Chinese purchases of US agriculture at $14B, USDA chief economist Robert Johansson says. This is a far cry below the roughly $36B that China promised via the phase one trade deal in January, but Ag Secretary Sonny Perdue says that $14B is only the number if China doesn't fulfill its promises--and that the agency expects China to start buying more this spring. Chinese demand is currently dampened because of the coronavirus epidemic. (Kirk.maltais@wsj.com; @kirkmaltais)

STORIES OF INTEREST

Yum Details Coronavirus Fall Out -- Market Talk

12:18 ET - Yum Brands says it expects its financial results in its current quarter to be "significantly impacted," by the coronavirus in China, and the fallout could continue beyond the period ending in March. The owner of KFC, Pizza Hut and Taco Bell has temporarily closed stores in China, but is also dealing with sales declines in Hong Kong and Taiwan, it says in a filing. Closures and shortened store hours have hurt Yum's suppliers to provide food and other needed materials to its mainland stores, the company says. Yum Brands falls 2%. (heather.haddon@wsj.com; @heatherhaddon)

Dim U.S. Farm Forecast Extends Into 2020

This year is shaping up as another tough one for U.S. farmers.

Despite trade deals in North America and between the U.S. and China, crop prices remain subdued. The federal government isn't expected to step in with fresh aid as it did last year.

The U.S. Department of Agriculture on Thursday said it expects farm debt in 2020 to rise to a record $425 billion, up from $415 billion last year. The debt-to-asset ratio for farms remains at its highest point in more than 15 years, the USDA said, and farm bankruptcies jumped 24% last year.

Domino's Pizza Delivers Strong Sales and Profit -- Update

Domino's Pizza Inc. has demonstrated it can generate strong sales and profit without sending its pies to customers via food-delivery companies.

The world's largest pizza chain on Thursday beat sales and profit expectations for its fiscal fourth quarter. Shares of the Ann Arbor, Mich.-based company leapt 24% to $368.

The company earned a profit of $129.3 million and $1.15 billion in revenue for its fiscal fourth quarter.

FUTURES MARKETS

Livestock Futures Finish Trading Down -- Market Talk

16:54 ET - Livestock futures on the CME finish down--with live cattle futures trading 1.2% lower at $1.1915 per pound and lean hog futures falling 1.1% to 66.875 cents per pound. Traders took a risk-off approach today, fueled by little actionable news and rallies this week giving traders a decent level to sell at, says Top Third Ag Marketing. (Kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - Feb 20 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
Feb 20       +$ 23.93            +$  3.34 
Feb 19       +$ 23.95            +$  2.57 
Feb 18       +$ 23.82            +$  4.72 
 
* 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   94.5 
      (Percent of Year-Ago)     Select   95.3 
 
USDA Boxed Beef, Pork Reports

Wholesale choice-grade beef prices Thursday fell $1.07 per hundred pounds, to $204.50, according to the USDA. Select-grade prices fell 16 cents per hundred pounds, to $201.60. The total load count was 177. Wholesale pork prices rose/ 36 cents, to $63.29 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

February 20, 2020 17:58 ET (22:58 GMT)

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