Cattle Situation and Outlook

Transcription

1 Photo courtesy of Judy Jacobson, Watford City Cattle Situation and Outlook Tim Petry Livestock Economist September 19, 2016 outlook pptx

2 Record Breaking Prices! 2014 A Year to Remember STARS ALIGNED PERFECTLY MED. FRAME #1 STEER CALF PRICES Pounds, N.D., Weekly JAN APR JUL OCT

3 HIGHLIGHTS Short Supply Feeder cattle supply tight Heifers retained Beef production down 6% Steer slaughter 3% Heifer slaughter 9% Beef cow slaughter 18% Dairy cow slaughter 10% Good Demand Beef exports strong Quantity same Value up 16% By-product value record high Domestic demand improving Economy Lower pork/poultry production than expected Record corn crop, improved pasture conditions

4 What Happened?

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6 WHAT HAPPENED? 2015 Record pork production Record chicken production Beef, pork, chicken exports struggling High $US value West Coast dock workers Bird flu Russia & world unrest Byproducts Record cold storage meat stocks Chinese/World Economics U.S. Stock Market Continued short cattle supply, but increasing Lower gas prices

7 WASDE U.S. Meat Production and Prices Change from forecast Change from forecast Change from 2016 Production Billion Pounds Percent Pounds Percent Pounds Percent Beef Pork Broilers Turkey Total meat Prices Dollars/cwt Dollars/cwt Steers Hogs Cents/lb Cents/lb Broilers Turkey Sept. 12, 2016

8 U.S. Ranking in World Production Exports Beef 1 4 Pork 2 1 Chicken 1 2 Turkey 1 1 Eggs 2 2

9 I-N-16 09/07/16 I-N-50 09/07/16 Data Source: USDA-ERS & USDA-FAS, Livestock Marketing Information Center

10 Mil. Pounds US BEEF AND VEAL IMPORTS Carcass Weight, Monthly JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center I-N-15 09/07/16

11 Thou. Head 90 BEEF COW SLAUGHTER Federally Inspected, Weekly JAN APR JUL OCT Avg Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center C-S-34 09/16/16

12 Mil. Head 140 TOTAL CATTLE INVENTORY BY CYCLE U.S., January Data Source: USDA-NASS Livestock Marketing Information Center C-N-40 02/01/16

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14 U.S. Drought Monitor August 5, 2014 August 6, 2013 August 7, 2012 August 2, 2011

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16 Percent 40 US RANGE AND PASTURE CONDITION Percent Poor and Very Poor, Weekly May Jul Sep Avg Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center G-NP-30 08/29/16

17 CHANGE IN BEEF COWS NUMBERS JANUARY 1, 2015 TO JANUARY 2016 (1000 Head) U.S. Total: 1029 Livestock Marketing Information Center Data Source: USDA-NASS 2/5/2016

18 C-N-38 02/01/16 C-N-30 02/01/16 Livestock Marketing Information Center; Data Source: USDA/NASS

19 HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, ND Thousand Head

20 Data Source: USDA-AMS & USDA-NASS - Livestock Marketing Information Center C-S-18 09/16/16

21 How much expansion is needed? 60 Cow Inventory and Beef Production Million Head Billion Pounds Source: USDA compiled by LMIC Cow Inventory Beef Production

22 Average Net Return to Labor and Management Per Beef Cow N.D. Farm Business Mgmt., Excluding Red River Valley Average Projected High 20% Low 20%

23 NOV FC vs. DEC CORN

24 NOV FC VS DEC CORN

25 MED. FRAME #1 STEER CALF PRICES Pounds, N.D., Weekly JAN APR JUL OCT Ave

26 MED. & LRG. #1 FEEDER STEER PRICES Pounds, N.D., Weekly JAN APR JUL OCT 2017 Futures 2016 Futures Ave

27 SF_LS750 Sioux Falls, SD Wed Sep 14, 2016 USDA-ND Dept of Ag Market News Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Fleshy Fancy West Fargo Stockyards - West Fargo, ND Feeder Cattle Weighted Average Report for 09/14/2016 Receipts: 1307 Last Week: N/A Year Ago: N/A No recent comparables for trend comparison. Annual "Big Iron" sale here at West Fargo Stock Yards saw an attractive offering of yearlings and a few calves. Yearlings were largely in off grass and in ight to moderate flesh. Demand mostly moderate. Included in the run were 47 percent steers, and 53 percent heifers. 88 percent over 600lbs.

28 SF_LS750 Sioux Falls, SD Wed Sep 14, 2016 USDA-ND Dept of Ag Market News West Fargo Stockyards - West Fargo, ND Feeder Cattle Weighted Average Report for 09/14/2016 Receipts: 1307 Last Week: N/A Year Ago: N/A Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Thin Fleshed

29 Premiums likely (but not consistent) for: Verified shots (ND VIP) Natural (no antibiotics or implants) Source/age verified Weaned Bovine Viral Diarrhea persistently infected (BVD-PI) tested negative Beef Quality Assurance (BQA) Replacement quality heifers * Check with your market before selling

30 CME Feeder Cattle Index 16% 21% 19% 22% 10% 9/1/05 12/1/05 3/1/06 6/1/06 9/1/06 12/1/06 3/1/07 6/1/07 9/1/07 12/1/07 3/1/08 6/1/08 9/1/08 12/1/08 3/1/09 6/1/09 9/1/09 12/1/09 3/1/10 6/1/10 9/1/10 12/1/10 3/1/11 6/1/11 9/1/11 12/1/11 3/1/12 6/1/12 9/1/12 12/1/12 3/1/13 6/1/13 9/1/13 12/1/13 3/1/14 6/1/14 9/1/14 12/1/14 3/1/15 6/1/15 9/1/15 12/1/15 3/1/16 6/1/16 9/1/16 17% 19% 0% 10% 7% 23%?

31 175 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT Avg Fut 2016 Fut 2017

32 Fed Cattle Price Predicament C-P-39 01/04/16 M-S-09 01/22/16 C-S-18 06/24/16 Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center

33 Competing Meats H-P-09 09/12/16 P-P-01 09/12/16 Data Source: USDA-AMS Livestock Marketing Information Center S-P-05 09/12/16

34 C-P-62 09/12/16 M-P-24 09/12/16 Data Source: USDA-AMS Livestock Marketing Information Center

35 $ Per Cwt SLAUGHTER COW PRICES 85-90% Lean, Weekly JAN APR JUL OCT Avg Livestock Marketing Information Center Data Source: USDA-AMS C-P-35 01/04/16

36 $ Per Cwt AVERAGE ANNUAL CATTLE PRICES lb Steer Calves lb Feeder Steers Fed Steers Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center C-P-06 09/02/16

37 Price Risk Management Tools Cash forward contract Video and internet auctions CME futures CME options Livestock Risk Protection (LRP) Livestock Gross Margin (LGM) Which one or combination fits your marketing plan?

38 Year Coverage Price Fall Steer Calf LRP Results Premium Actual Price LRP Payment LRP Profit July 15 to Nov 15 (17 wk)

39 SF_LS766 Sioux Falls, SD Thu Nov 12, 2015 USDA-ND Dept of Ag Market News Stockmans Livestock Exchange Feeder Cattle Weighted Average Report for 11/12/2015 Receipts: 4101 Last Week: 4762 Year Ago: 4553 Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Calves Calves Calves

40 Volatile Prices Will Continue! Questions!