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Livestock Markets and Outlook
Spring Livestock Conference 2013Douglas County, Oregon
April 13, 2013
James G. RobbDirector
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
Data Source: USDA-AMS
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
Data Source: USDA-NASS, Forecasts by LMIC
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
Data Source: USDA-NASS and ERS, Forecasts by LMIC
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
Data Source: USDA-NASS and ERS, Forecasts by LMIC
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
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
Data Source: USDA-FAS, Compiled & Analysis by LMIC
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
Data Source: USDA-FAS, Compiled & Analysis by LMIC
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
Data Source: USDA-AMS & APHIS
SLAUGHTER STEERS & HEIFERSIMPORTS FROM CANADA
Weekly
0
5
10
15
20
JAN APR JUL OCT
Thou. Head
Avg.2007-11
2012
2013
Data Source: USDA-AMS & APHIS
Chicken, Pork and Lamb
BROILER EGGS SETWeekly
175
180
185
190
195
200
205
210
215Mil. Eggs
Avg.2007-11
2012
2013
Data Source: USDA-NASS
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
Data Source: USDA-NASS, Forecasts by LMIC
COMMERCIAL PORK PRODUCTIONQuarterly
5.0
5.2
5.4
5.6
5.8
6.0
6.2
6.4
6.6
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil. Pounds
Avg.2007/11
2012
2013
2014
Data Source: USDA-NASS, Forecasts by LMIC
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
Data Source: USDA-FAS and ERS, Forecasts by LMIC
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
Data Source: USDA-AMS
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
Data Source: USDA-NASS
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
Data Source: USDA-FAS and ERS, Forecasts by LMIC
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
Data Source: USDA-AMS
COMMERCIAL LAMB AND MUTTON PRODUCTION
Quarterly
30.0
34.0
38.0
42.0
46.0
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Mil. PoundsAvg.2007/11
2012
2013
2014
Data Source: USDA-NASS, Forecasts by LMIC
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)
Data Source: USDA-NASS
-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
Data Source: USDA-NASS
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
Data Source: USDA-NASS
Data Source: USDA-NASS, Forecasts by LMIC
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
Data Source: USDA-NASS
COMMERCIAL BEEF PRODUCTIONQuarterly
5.6
5.8
6.0
6.2
6.4
6.6
6.8
7.0
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil. Pounds
Avg.2007/11
2012
2013
2014
Data Source: USDA-NASS, Forecasts by LMIC
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
Data 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
Data Source: USDA-AMS
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