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1 CattleFax Trends + Cow-Calf Webinar September 4, 2013 Presentation Preview Influence of new crop grain and forage production on year-end prices Fundamentals shaping fall 2013 and early 2014 calf and feeder cattle market prices Expectations for U.S. herd expansion and implications for the winter female market Profit opportunities for winter stocker and backgrounding operations 1

2 Ryan Dunn Marketing Manager: U.S. cattle Biologicals, Zoetis Features components of No. 1 viral respiratory vaccine AND No. 1 Mannheimia (Pasteurella) haemolytica bacterin in one convenient dose 1 Same USDA labeled level of protection as with BOVI-SHIELD GOLD 5 and ONE SHOT independently 1 Zoetis Global Market Research. Beacon MR, Gfk Kynetec, 2012 December Report. 2

3 Upgrade your viral respiratory and Mannheimia (Pasteurella) haemolytica combination vaccine with BOVI-SHIELD GOLD ONE SHOT Longest demonstrated duration of immunity (DOI) Only BOVI-SHIELD GOLD ONE SHOT helps protect your calves for at least 279 days of immunity against IBR and BVD Types 1 and 2 respiratory disease. BOVI-SHIELD GOLD ONE SHOT can help you prevent bovine respiratory disease (BRD), which can result in losses of up to $240 per head. 1,2 With BOVI-SHIELD GOLD ONE SHOT, you ll enjoy the added convenience of protection in just one dose during weaning and on arrival, the busiest times of your year. 1 Hicks B. Impact of morbidity on performance and profitability of feedlot cattle. Beef Cattle Research Update. Oklahoma State University. Panhandle Research and Extension Center. May 2006: Grubbs ST, Kania SA, Potgieter LND. Prevalence of ovine and bovine respiratory syncytial virus infection in cattle determined with a synthetic peptide-based immunoassay. J Vet Diagn Invest 2001;13(2): UPGRADE YOUR PROTECTION Superior IBR and BVD Types 1 and 2 respiratory disease DOI compared to competitive combination products Convenient, one-dose administration 2 ml dose administered SC in the neck region Available in 5-, 10- and 50-dose sizes 3

4 Chad Spearman Analyst Grain Market Specialist, CattleFax 4

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8 Spot corn futures are expected to find support from $ /bu range and resistance in the $5.40-$5.60/bu range 8

9 Mike Murphy Analyst Risk Management Specialist, CattleFax 9

10 F ,000 hd 2013 YTD: 36.2% 2012 YTD: 36.4% 10-Yr. Avg. YTD: 37.1% 5-Yr. Avg. YTD: 36.7% 10

11 30% excess feeding capacity 11

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15 CattleFax U.S. Annual Average Price Forecasts F 2014F 550-lb steer calves ($/cwt.) $ $ $ lb feeder steers ($/cwt.) $ $ $ Fed steers ($/cwt.) $ $ $ Utility slaughter cows ($/cwt.) $78.93 $78.00 $84.00 Composite Boxed Beef Cutout ($/cwt.) $ $ $ All-Fresh Retail Beef ($/lb.) $4.70 $4.93 $5.05 Omaha Corn ($/bu.) $7.05 $6.45 $ vs % +7.6% +2.7% +7.6% +3.4% +2.4% % Lance Zimmerman Analyst, CattleFax 15

16 What are the key differences between high- and low-return producers? Habits of Low-Cost/ High-Return Producers Below average cow costs lower feed costs lessen debt decrease operating expenses Higher productivity increase sale weights improve conception rates These are long-term management decisions often on a multi-year time horizon create additional pounds weaned per cow exposed Improve overall management of genetics, herd health and nutrition 16

17 $600+ per head value increase in 4 years. Stair Steps to Profitability + $2 to $5/cwt. + $1.50 to $2/cwt. + $1 to $8/cwt. + $3 to $5/cwt. Performance History (feedlot/carcass) Age-and-Source Verified Natural and Premium Programs (management/breed) Certified Vaccination + $4 to $5/cwt. - Weaned Average Cattle = Average Price Under Managed Cattle 17

18 Cow-Calf Margin Management Three ways to enhance cow-calf and stocker margins 1. Become a high-return producer 2. Improve or develop a ranch marketing plan 3. Evaluate opportunities for retained ownership of calves in later segments 4. Improve or develop a risk management plan These are short-term management decisions that are more adaptable. Does a changing marketing plan change your price environment? 18

19 Beware: Seasonal patterns can shift depending on market factors. 19

20 Questions? Mike Murphy Chad Spearman Lance Zimmerman 20

21 What is CattleFax? Questions? Mike Murphy Chad Spearman Lance Zimmerman 21

22 Next Trends+ Webinar January 22, 2013 Archive of this webinar will be accessible from 22