Livestock Markets and Outlook Spring Livestock Conference 2013 Douglas County, Oregon April 13, 2013 James G. Robb Director [email protected].

Livestock Markets and Outlook

Spring Livestock Conference 2013Douglas County, Oregon

April 13, 2013

James G. RobbDirector

[email protected]

USDA Members:ERSAPHISGIPSANASSWAOBAMS

Associate Members:AFBFASINCBANPBCME-GroupCanadian ConsortiumNoble FoundationCoBankTCFACWBTCU

29 land Grant Universities:

Topics: Markets and …

• Grain/Feedstuff Markets• Corn

• A Quick Look at Hay

• Aspects of U.S. Consumer Beef Demand• International Trade Comments: Beef & Cattle• Poultry, Pork and Lamb Market Comments• Cattle Markets and Outlook• Economic Environment Summary

USDA Data Sources – NASS, AMS, FAS, and ERS

All Forecasts – LMIC

Grain/Feedstuffs

Drought – A Game Changer

OMAHA CORN PRICESWeekly

2.50

3.50

4.50

5.50

6.50

7.50

8.50

9.50$ Per Bu.

Avg.2007-11

2012

2013

Data Source: USDA-AMS

U S TOTAL CORN SUPPLY AND PRICECrop Year

8

9

10

11

12

13

14

15

1988 1991 1994 1997 2000 2003 2006 2009 2012

Bil. Bushels

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00$ Per Bushel

Supply

Price

Data Source: USDA-NASS, Forecasts by LMIC

Data Source: USDA-NASS and ERS, Forecasts by LMIC

U.S. CORN DISAPPEARANCE AND STOCKSCrop Year

0

2

4

6

8

10

12

14

16

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Bil. Bushels

Stocks

Exports

Food, Seed& Industrial

Feed &Residual

DISTILLER DRIED GRAIN PRICESChicago, Illinois, Weekly

100

150

200

250

300

350

JAN

APRJU

LOCT

$ Per Ton

Avg.2007-11

2012

2013


U S ALL HAY STOCKSDecember 1

70

80

90

100

110

120

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Mil. Tons

Data Source: USDA-NASS

U S ALL HAY SUPPLYCrop Year

100

110

120

130

140

150

160

170

180

190

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Mil. Tons

May 1Stocks

Production


US Consumer Demand and Consumption (Disappearance)

QTRLY GROSS DOMESTIC PRODUCT (GDP)Real Dollar (2005) Change from Previous Quarter

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

1997 1999 2001 2003 2005 2007 2009 2011

Percent Change

Data Source: Dept. Commerce-BEA

PER CAPITA DISPOSABLE PERSONAL INCOME

Quarterly

26000

28000

30000

32000

34000

36000

38000

40000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Dollars

CurrentDollar

2005Dollar

Data Source: Department of Commerce-BEA

Data Source: LMIC

RETAIL ALL FRESH BEEF DEMAND INDEXAnnual, Using CPI 1990=100

10096

9186 86

8279

75 75 77 80 8185 83

9288 85 85

8077 75 77 79

0

20

40

60

80

100

120

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Index Value


U S BEEF CONSUMPTIONPer Capita, Retail Weight, Annual

50

55

60

65

70

1989 1992 1995 1998 2001 2004 2007 2010 2013

Pounds

U S RED MEAT & POULTRY CONSUMPTIONPer Capita, Retail Weight, Annual

0

50

100

150

200

1989 1992 1995 1998 2001 2004 2007 2010 2013

Pounds

Turkey

TotalChicken

Pork

Beef


CPI - MEATS1982-1984 Base, Monthly

190

195

200

205

210

215

220

225

230

235

240

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Index

Avg.2007-11

2012

2013

Data Source: Bureau of Labor Statistics

International Trade Comments

WORLD ECONOMIC GROWTHPercent Change, Annual

-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Percent

India

China

Emergingeconomies

Advancedeconomies

Data Source: IMF

U S BEEF AND VEAL EXPORTSCarcass Weight, Monthly

100

120

140

160

180

200

220

240

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Mil. Pounds

Avg.2007-11

2012

2013

Data Source: USDA-FAS and ERS

U S BEEF EXPORTS TO MAJOR MARKETSCarcass Weight, Monthly

0

10

20

30

40

50

60

70

80

90

2005 2006 2007 2008 2009 2010 2011 2012 2013

Mil. Pounds

Japan

Canada

Mexico

SouthKorea

Data Source: USDA-FAS and ERS

U S BEEF AND VEAL EXPORTSCarcass Weight, Annual

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1989 1992 1995 1998 2001 2004 2007 2010 2013

Bil. Pounds

Data Source: USDA-FAS and ERS, Forecasts by LMIC


U S BEEF AND VEAL IMPORTSCarcass Weight, Annual

1.5

2.0

2.5

3.0

3.5

4.0

1989 1992 1995 1998 2001 2004 2007 2010 2013

Bil. Pounds

U S BEEF INDUSTRY EXPORT VALUESAnnual

0

1

2

3

4

5

6

7

8

1986 1989 1992 1995 1998 2001 2004 2007 2010

Bil. $

Tallow &Greases

VarietyMeats

Hides &Skins

Beef &Veal

Live Cattle

Data Source: USDA-FAS, Compiled & Analysis by LMIC

U S BEEF INDUSTRY IMPORT VALUESAnnual

0

1

2

3

4

5

6

1986 1989 1992 1995 1998 2001 2004 2007 2010

Bil. $

Tallow &Greases

VarietyMeats

Hides &Skins

Beef &Veal

Live Cattle


U S BEEF INDUSTRY NET EXPORT VALUESAnnual

-3

-2

-1

0

1

2

3

4

1986 1989 1992 1995 1998 2001 2004 2007 2010

Bil. $

LiveCattle

Beef &Veal

Hides &Skins

Tallow,Grease &Var Meat

Total


FEEDER CATTLE IMPORTS FROM MEXICOWeekly

0

10

20

30

40

50

60

70

JAN APR JUL OCT

Thou. Head

Avg.2007-11

2012

2013

Data Source: USDA-AMS & APHIS

FEEDER CATTLE IMPORTS FROM CANADAWeekly

0

2

4

6

8

10

12

JAN APR JUL OCT

Thou. Head

Avg.2007-11

2012

2013


SLAUGHTER STEERS & HEIFERSIMPORTS FROM CANADA

Weekly

0

5

10

15

20

JAN APR JUL OCT

Thou. Head

Avg.2007-11

2012

2013


Chicken, Pork and Lamb

BROILER EGGS SETWeekly

175

180

185

190

195

200

205

210

215Mil. Eggs

Avg.2007-11

2012

2013


RTC BROILER PRODUCTIONQuarterly

8.5

8.7

8.9

9.1

9.3

9.5

9.7

JAN-MAR APR-JUN JUL-SEP OCT-DEC

Bil. Pounds

Avg.2007/11

2012

2013

2014


COMMERCIAL PORK PRODUCTIONQuarterly

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6


Bil. Pounds

Avg.2007/11

2012

2013

2014


U S PORK EXPORTSAs a Percentage of Production, Carcass Weight, Annual

0

5

10

15

20

25

1989 1992 1995 1998 2001 2004 2007 2010 2013

Percent


BASE SLAUGHTER HOG PRICESNational, Weighted Average Carcass Price, Weekly

53

58

63

68

73

78

83

88

93

98

103$ Per cwt

Avg.2007-11

2012

2013


TOTAL SHEEP & LAMB POPULATIONJanuary 1, U.S., Annual

0

10

20

30

40

50

60

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Mil. Head


U S LAMB AND MUTTON IMPORTSAs a Percentage of Production, Carcass Weight, Annual

0

25

50

75

100

125

1989 1992 1995 1998 2001 2004 2007 2010 2013

Percent


SLAUGHTER LAMB PRICESNational Direct (November 2010 to present),

Hot Carcass, Weekly

170

190

210

230

250

270

290

310

330

350

370

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013


COMMERCIAL LAMB AND MUTTON PRODUCTION

Quarterly

30.0

34.0

38.0

42.0

46.0


Mil. PoundsAvg.2007/11

2012

2013

2014


Cattle Market

TOTAL CATTLE INVENTORY BY CYCLEU.S., January 1

65

75

85

95

105

115

125

135

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mil. Head

1938-49

1949-58

1958-67

1967-79

1979-90

1990-04

2004-13

Data Source: USDA-NASS, Compiled & Analysis by LMIC

CHANGE IN BEEF COWS NUMBERSJANUARY 1, 2012 TO JANUARY 2013

(1000 Head)


-550

-119 -100

-79

-58-45

-44

-38

-32

-24

-22

-20

-20

-15-10

-10

-10

-10

-8

-5

-5

-5

-5

-4

MD -2

-1

MA -1NH -1

0

RI 0

DE 1

1

1

NJ 1CT 2

2

VT 24

4

4

5

10

2229

30

33

41

50 60

78

-550 to -15-15 to -1-1 to 44 to 79

U.S. Total: -862


HEIFERS HELD AS BEEF COW REPLACEMENTS

January 1, U.S.

4.5

5.0

5.5

6.0

6.5

7.0

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

Mil. Head

+1.9 %

BEEF COW SLAUGHTERFederally Inspected, Weekly

45

50

55

60

65

70

75

80

85Thou. Head

Avg.2007-11

2012

2013



JANUARY 1 TOTAL COW INVENTORYU.S., Annual

36

38

40

42

44

46

48

50

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Mil. Head

BEEF PRODUCTION vs. CATTLE INVENTORY

Inventory on January 1, U.S.

85

90

95

100

105

110

115

1988 1991 1994 1997 2000 2003 2006 2009 2012

Mil. Head

22

23

24

25

26

27

28Bil. Pounds

Commercial Beef Production

Total Cattle Inventory


COMMERCIAL BEEF PRODUCTIONQuarterly

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0


Bil. Pounds

Avg.2007/11

2012

2013

2014


ANNUAL AVERAGE CATTLE PRICESSouthern Plains

55

75

95

115

135

155

175

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

$ Per Cwt

500-600lbSteerCalves

700-800lbFeederSteers

FedSteers

Data Source: USDA-AMS, Forecasts by LMIC

MED. & LRG. #1 STEER CALF PRICES500-600 Pounds, Southern Plains, Weekly

100

110

120

130

140

150

160

170

180

190

200

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013

Data Source: USDA-AMSData Source: USDA-AMS


MED. & LRG. #1 FEEDER STEER PRICES700-800 Pounds, Southern Plains, Weekly

90

100

110

120

130

140

150

160

170

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013


SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly

85

90

95

100

105

110

115

120

125

130

135

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013

ESTIMATED AVERAGE COW CALF RETURNSReturns Over Cash Cost (Includes Pasture Rent), Annual

-100

-50

0

50

100

150

200

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

$ Per Cow

Data Source: USDA-AMS, NASS, Analysis and Forecasts by LMIC

CHOICE STEER PRICE vs BREAKEVENCattle Feeding, S. Plains, Monthly

75

85

95

105

115

125

135

145

2005 2006 2007 2008 2009 2010 2011 2012 2013

$ Per Cwt

SteerPrice

Breakeven

ProjectedBreakeven

Latest Data: March 2013

Data Source: USDA-AMS, NASS, Analysis and Forecasts by LMIC

Economic Environment ….

• Domestic Consumer Demand has Stabilized and is Slowly Improving for Red Meats. Recession versus +3% GDP Growth?

• Foreign Beef Demand Strong but Slipping

• Price Volatility Will Continue (Globalization, Ethanol, etc.)

• Market Shocks Will Continue (9-11-2001; BSE; 2008 Credit Crisis)

• Market Segmentation Accelerating

• Economic Incentive to Grow U.S. Cowherd Overcome by Drought

• Controls Already Set to Dramatically Reduced Beef Output

• High Feedstuff Price Range Expected to Continue

• Headwind to Calf and Yearling Prices -- Compressed Margins for Cattle Feeders and Beef Packers

• Mistakes Are Costly, Sound Business Practices Required

• Agile Firms Will Benefit…. Be Adaptable NOT Adapted

Thank You!

www.lmic.info

Livestock Markets and Outlook Spring Livestock Conference 2013 Douglas County, Oregon April 13, 2013 James G. Robb Director [email protected].

Documents

usdanass slide

usdaams slide

ers slide

forecasts lmic slide

lamb slide

grainfeedstuffs slide

imf slide

adapted slide