Cattle Market Situation and Outlook: 2015 and Beyondagecon.okstate.edu/extension/files/Peel_outlook2014rural.pdf · Cattle Market Situation and Outlook: 2015 and Beyond Derrell S

10/30/2014

1

Cattle Market Situation and Outlook: 2015 and Beyond

Derrell S. PeelBreedlove Professor of Agribusiness and Extension Livestock Marketing Specialist

Oklahoma State University

C-P-0610/12/14

50

75

100

125

150

175

200

225

250

275

300

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

$ Per Cwt

AVERAGE ANNUAL CATTLE PRICESSouthern Plains

500‐600lb Steer Calves 700‐800lb Feeder Steers Fed Steers

Data Source: USDA‐AMS, Compiled and Analysis by LMIC

Livestock Marketing Information Center

10/30/2014

2

WHOLESALE BEEF PRICEChoice, Monthly

120130140150160170180190200210220230240250260

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Per Cwt


Data Source: USDA‐AMS & USDA‐NASS, Compiled & Analysis by LMIC

FED, FEEDER AND CALF PRICESWeekly

80

100

120

140

160

180

200

220

240

260

280

300

2009 2010 2011 2012 2013 2014

$ Per Cwt.

Fed 775 lb. Steers 475 lb. Steers

10/30/2014

3

C-P-3510/27/14

45

55

65

75

85

95

105

115

125

135

145

JAN APR JUL OCT

$ Per Cwt.

SLAUGHTER COW PRICESSouthern Plains, 85‐90% Lean, Weekly

Avg. 2008‐12 2013 2014

Data Source: USDA‐AMS


C-N-3007/28/14

20

25

30

35

40

1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014

Mil. Head

JANUARY 1 FEEDER CATTLE SUPPLIESResidual, Outside Feedlots, U.S.

Data Source: USDA‐NASS


10/30/2014

4

TOTAL BEEF COW INVENTORY BY CYCLEU.S., January 1

28

29

30

31

32

33

34

35

36

37

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

Mil. Head

1990-04

2004-14

C-N-4001/31/14Livestock Marketing Information Center

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

C-N-3807/28/14

4.5

5

5.5

6

6.5

7

1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014

Mil. Head

HEIFERS HELD AS BEEF COW REPLACEMENTSJanuary 1, U.S.

+1.7 %



10/30/2014

5

C-S-1210/23/14

625

675

725

775

825

875

JAN MAR MAY JUL SEP NOV

Thou. Head

HEIFER SLAUGHTERFederally Inspected, Monthly

Avg. 2008‐12 2013 2014



C-S-2010/23/14

170

190

210

230

250

270

290

310

330

350


Thou. Head

BEEF COW SLAUGHTERFederally Inspected, Monthly

Avg. 2008‐12 2013 2014



10/30/2014

6

JANUARY 1 BEEF COW INVENTORYU.S., Annual

28

30

32

34

36

38

4019

82

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Mil. Head

Analysis by Derrell Peel

Data Source: USDA‐NASS22 Sep 2014

U.S. Ave., -11.0 %

Change in Beef Cow Inventory, January 1, 2007‐2014

‐21.1%

‐7.0%

+6.8%

‐5.9%‐5.3%

‐3.4%‐5.7%

‐12.0%‐1.75, 2011

‐15.9%+6.1, 2011

‐5.5%

‐25.1%‐3.7%, 2011

‐13.6%

‐7.7%

‐16.2%

+0.3%

+2.0%

‐7.4%

‐23.1%

‐2.3%‐17.9%

‐4.2%

‐12.4%‐5.0%

‐11.0%

‐13.6%

‐8.2%

‐9.4%

‐2.3%

‐14.3%

‐8.2%

+2.4%

+5.6%

+13.3%

‐2.9%

‐7.5%

Source: USDA‐NASS, Analysis by Derrell Peel

10/30/2014

7

U.S. Ave., -3.6 %

Percent Change in Pasture Acreage,

2007‐2012

‐13.1%

‐1.6%

‐3.0%

‐1.1%+0.2%

+2.6%‐7.2%

‐4.4%+0.2%

‐2.4%

‐1.4%

‐11.5%

+5.8%

‐18.9%

‐5.7%

‐4.9%

‐3.8%

‐9.9%

‐9.7%‐23.5%

‐1.4%

‐21.2%‐5.6%

+0.30%

‐31.0%

‐8.7%

‐15.9%

‐19.0%

‐20.8%

‐9.6%

‐14.8%

‐23.6%

‐16.6%

‐15.1%

‐2.6%

Source: USDA‐NASS, Census of AgricultureAnalysis by Derrell Peel

10/30/2014

8

10

15

20

25

30

35

40

May Jul Sep

Percent

US RANGE AND PASTURE CONDITIONPercent Poor and Very Poor, Weekly

Avg. 2008‐12 2013 2014



G-NP-3010/27/14

10/30/2014

9

G-NP-3310/27/14

15

20

25

30

35

40

45

50

55

May Jul Sep

Percent

SOUTHERN PLAINS REGION RANGE AND PASTURE CONDITION

Percent Poor and Very Poor, Weekly

Avg. 2008‐12 2013 2014



C-N-1010/24/14

9.5

10

10.5

11

11.5

12

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

Mil. Head

CATTLE ON FEEDUS Total, Monthly

Avg. 2008/12 2013 2014



10/30/2014

10

C-P-2110/01/14

75

100

125

150

175

200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$ Per Cwt

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

Steer Price Breakeven Projected Breakeven



Latest Data: September 2014

C-P-2210/01/14

‐325

‐275

‐225

‐175

‐125

‐75

‐25

25

75

125

175

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Per 1000 lbs

AVERAGE RETURNS TO CATTLE FEEDERSFeeding 725 Lb. Steers. S. Plains, Monthly



Latest Data: September 2014

10/30/2014

11

200

220

240

260

280

300

320

340

360

380

400


1000 Head

CATTLE ON FEEDOklahoma Total, Monthly

Avg. 2008/12 2013 2014



Share of Cattle on FeedTexas and Oklahoma, 12 Month Moving Ave.

21.0%

23.0%

25.0%

27.0%

29.0%

31.0%

Jan‐97

Jan‐98

Jan‐99

Jan‐00

Jan‐01

Jan‐02

Jan‐03

Jan‐04

Jan‐05

Jan‐06

Jan‐07

Jan‐08

Jan‐09

Jan‐10

Jan‐11

Jan‐12

Jan‐13

Jan‐14

10/30/2014

12

Share of Cattle on FeedIowa and Nebraska, 12 Month Moving Ave.

21.0%

23.0%

25.0%

27.0%

29.0%

31.0%

Jan‐97

Jan‐98

Jan‐99

Jan‐00

Jan‐01

Jan‐02

Jan‐03

Jan‐04

Jan‐05

Jan‐06

Jan‐07

Jan‐08

Jan‐09

Jan‐10

Jan‐11

Jan‐12

Jan‐13

Jan‐14

Texas Triangle and Omaha Corn Prices

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

2011 2012 2013 2014

$ Per Bushel

Omaha

Texas



10/30/2014

13

C-S-0910/23/14

2200

2300

2400

2500

2600

2700

2800

2900

3000

3100


Thou. Head

COMMERCIAL CATTLE SLAUGHTERMonthly

Avg. 2008‐12 2013 2014



C-S-18A10/24/14

760

770

780

790

800

810

820

830

JAN APR JUL OCT

Pounds

CATTLE DRESSED WEIGHTFederally Inspected, Weekly

Avg. 2008‐12 2013 2014

Data Source: USDA‐AMS & USDA‐NASS


10/30/2014

14

C-S-1810/24/14

810

820

830

840

850

860

870

880

890

900

910

JAN APR JUL OCT

Pounds

STEER DRESSED WEIGHTFederally Inspected, Weekly

Avg. 2008‐12 2013 2014

Data Source: USDA‐AMS & USDA‐NASS


M-S-0210/23/14

1700

1800

1900

2000

2100

2200

2300

2400


Mil. Pounds

COMMERCIAL BEEF PRODUCTIONMonthly

Avg. 2008‐12 2013 2014



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15

BEEF PRODUCTION vs. BEEF COW INVENTORY

Inventory on January 1, U.S.

28

29

30

31

32

33

34

35

36

37

1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

Mil. Head

22

23

24

25

26

27

28Bil. Pounds

Commercial Beef Production

Beef Cow Inventory

M-S-2308/10/12Livestock Marketing Information Center

Data Source: USDA‐AMS, Compiled & Analysis by LMIC

M-P-1109/17/14

375

400

425

450

475

500

525

550

575

600

625


Cents Per Pound

RETAIL BEEF PRICEAll Fresh, Monthly

Avg. 2008‐12 2013 2014

Data Source: Bureau of Labor Statistics & USDA‐ERS


10/30/2014

16

RETAIL BEEF PRICEMonthly

350

375

400

425

450

475

500

525

550

575

600

625

650

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Per Cwt

All Fresh

Choice



M-P-0509/17/14

300

320

340

360

380

400

420

440


Cents Per Pound

RETAIL PORK PRICEMonthly

Avg. 2008‐12 2013 2014



10/30/2014

17

M-P-1209/17/14

170

175

180

185

190

195

200

205


Cents Per Pound

RETAIL CHICKEN PRICEBroiler Composite, Monthly

Avg. 2008‐12 2013 2014



I-N-1610/06/14

150

170

190

210

230

250

270


Mil. Pounds

US BEEF AND VEAL EXPORTSCarcass Weight, Monthly

Avg. 2008‐12 2013 2014

Data Source: USDA‐ERS & USDA‐FAS


10/30/2014

18

I-N-0608/29/14

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1991 1994 1997 2000 2003 2006 2009 2012 2015

Bil. Pounds

US BEEF AND VEAL EXPORTSCarcass Weight, Annual

Data Source: USDA‐ERS & USDA‐FAS, Compiled & Analysis by LMIC


I-N-1510/06/14

145

165

185

205

225

245

265

285


Mil. Pounds

US BEEF AND VEAL IMPORTSCarcass Weight, Monthly

Avg. 2008‐12 2013 2014



10/30/2014

19

I-N-1208/29/14

1.5

2.0

2.5

3.0

3.5

4.0

1991 1994 1997 2000 2003 2006 2009 2012 2015

Bil. Pounds

US BEEF AND VEAL IMPORTSCarcass Weight, Annual

Data Source: USDA‐ERS & USDA‐FAS, Compiled & Analysis by LMIC


I-N-0310/06/14

30

50

70

90

110

130

150

170


Thou. Head

US CATTLE IMPORTS FROM MEXICOMonthly

Avg. 2008‐12 2013 2014



10/30/2014

20

I-N-0410/06/14

30

50

70

90

110

130

150

170


Thou. Head

US CATTLE IMPORTS FROM CANADAMonthly

Avg. 2008‐12 2013 2014



Price‐Weight RelationshipMedium/Large No. 1 Steers, Okla 7 Mkt. Ave.

150165180195210225240255270285300315330345

375 425 475 525 575 625 675 725 775 825 875 925

weight (pounds)

Pri

ce (

$/cw

t)

12-Sep-14

24-Oct-14

Nov-13

10/30/2014

21

Steer Price, Total Value and Value of Gain October 24, 2014, 7 Mkt. Ave., Oklahoma

Weight (lbs)

Average Price ($/cwt.)

Total Value ($/hd)

VOG400 lb. Beg. Weight($/lb.)

VOG450 lb. Beg. Weight($/lb





400 $322.26 $1,289

450 $304.80 $1,372 $1.65

500 $286.43 $1,432 $1.43 $1.21

550 $271.16 $1,491 $1.35 $1.20 $1.18

600 $261.13 $1,567 $1.39 $1.30 $1.35 $1.51

650 $254.22 $1,652 $1.45 $1.40 $1.47 $1.61 $1.71

700 $249.23 $1,745 $1.52 $1.49 $1.56 $1.69 $1.78 $1.84

750 $244.76 $1,836 $1.56 $1.55 $1.61 $1.72 $1.79 $1.83

800 $236.35 $1,891 $1.50 $1.48 $1.53 $1.60 $1.62 $1.59

850 $227.86 $1,937 $1.44 $1.41 $1.44 $1.48 $1.48 $1.42

900 $218.59 $1,967 $1.36 $1.32 $1.34 $1.36 $1.34 $1.26

C-P-6609/10/14

‐100

0

100

200

300

400

500

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

$ Per Cow

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

Data Source: USDA‐AMS, Compiled and Analysis by LMIC


10/30/2014

22

2015 Market Situation

• Strong prices for cattle and beef

• Record cow‐calf returns

• Value of gain for stocker production

• Market versus production risk

• Margin squeeze for feedlots and packers

• Beef demand challenges

• Continued herd rebuilding– If no drought

Documents

Cattle Market Situation and Outlook: 2015 and Beyondagecon.okstate.edu/extension/files/Peel_outlook2014rural.pdf · Cattle Market Situation and Outlook: 2015 and Beyond Derrell S