Beef Cattle Outlook Dr. Curt Lacy Extension Economist-Livestock

Transcription

1 Beef Cattle Outlook Dr. Curt Lacy Extension Economist-Livestock

2 Georgia Grazing School August 7-8, 2013 Athens, GA August 8-9, 2013 Athens, GA

3 Current Situation

4 MED. & LRG. #1 & 2 STEER CALF PRICES pounds, Mississippi, Weekly $ Per Cwt Avg Livestock Marketing Information Center Data Source: USDA-AMS, Compiled by LMIC 04/29/13

5 MED. & LRG. #1 & 2 FEEDER STEER PRICES Pounds, Mississippi, Weekly $ Per Cwt Avg Livestock Marketing Information Center Data Source: USDA-AMS, Compiled by LMIC 04/29/13

6 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT Avg Livestock Marketing Information Center Data Source: USDA-AMS

7 Factors shaping markets today and into Feed supplies/prices 2. Beef Demand 3. Cattle supplies

8 Feed Supplies

9 $ Relationship between Corn and Cattle Prices $9.00 $ $8.00 $ $ $ $90.00 $7.00 $6.00 $5.00 $70.00 $4.00 $50.00 $ Nearby corn futures

10 Mil bu 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 U.S. Corn Supply and Demand 19.8% 17.5% 11.6% 12.8%13.9% 15.4% 13.1% 8.6% 7.9% 6.5% 2004/ / / / /13 50% 40% 30% 20% 10% 0% Ending Stocks Production Domestic Use and Exports Stocks:Use Data Source: USDA, WASDE. Chart prepared by Dr. Nathan Smith, UGA

11 U S TOTAL CORN SUPPLY AND PRICE Crop Year Bil. Bushels $ Per Bushel Supply Price Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Forecasts by LMIC G-NP-13 07/11/13

12

13 Index Value 120 RETAIL ALL FRESH BEEF DEMAND INDEX Annual, Using CPI 1990= Livestock Marketing Information Center Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC

14 Beef and Feeder Cattle Demand Beef Demand Consumers income Prices of competing meats Exports Feeder Cattle Demand Fed cattle profits Price of fed cattle Price of corn Available capital Stocker cattle profits Price of feeder cattle Cost of grazing & feed

15

16 Dollars PER CAPITA DISPOSABLE PERSONAL INCOME Quarterly Current Dollar 2005 Dollar Livestock Marketing Information Center Data Source: Bureau of Economic Analysis 05/30/13

17 Jan-00 Sep-00 May-01 Jan-02 Sep-02 May-03 Jan-04 Sep-04 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Cents/pound $800.0 Monthly Retail Meat Prices $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 Ground Chuck Uncooked Beef Roast Sirloin, bnls, Choice Center-cut Pork Chop Spiral-cut Ham Chicken leg Boneless Chicken Breast $100.0 $0.0 Data Source: Bureau of Labor Statistics. Compiled by LMIC.

18 Jan-00 Jun-00 Nov-00 Apr-01 Sep-01 Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Pounds of Meat 90.0 Pounds of Retail Meat that $100 Will Purchase Ground Chuck Beef Roasts Boneless Choice sirloin Bone-in Pork Chop Spiral cut Ham Chicken Legs Boneless Chicken Breast Data Source: Bureau of Labor Statistics. Compiled by LMIC.

19 Bil. Pounds 3.0 U S BEEF AND VEAL EXPORTS Carcass Weight, Annual Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC I-N-06 01/29/13

20 Beef Exports Bil. $ 7 Source: US DA and USMEF US Beef Export Values

21 U S BEEF INDUSTRY NET EXPORT VALUES Annual Bil. $ Live Cattle Beef & Veal Hides & Skins Tallow, Grease & Var Meat Total Livestock Marketing Information Center Data Source: USDA-FAS, Compiled & Analysis by LMIC I-N-72 07/10/13

22 BOXED BEEF CUTOUT VALUE Choice Lbs. Carcass, Weekly $ Per Cwt Avg JAN APR JUL OCT Livestock Marketing Information Center C-P-62 07/22/13 Data Source: USDA-AMS

23 Beef Demand Summary Domestic demand remains very stable It will be a while before consumers incomes improve appreciably International demand remains very strong

24 AVERAGE RETURNS TO CATTLE FEEDERS $ Per Head 275 Feeding 725 Lb. Steers, S. Plains, Monthly Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center 07/19/13

25 CATTLE AND BEEF SUPPLIES

26 BEEF COWS THAT CALVED JANUARY 1, 2013 (1000 Head) to to to to 4016 VT 12 NH 4 MA 7 RI 2 CT 6 NJ 9 DE 4 MD U.S. Total: Livestock Marketing Information Center Data Source: USDA-NASS 02/04/13

27 CHANGE IN BEEF COWS NUMBERS JANUARY 1, 2002 TO JANUARY 2012 (1000 Head) VT 0 NH 0 MA 2 RI 0 CT -2 NJ -1 DE -1 MD to to to 1 1 to 48-1 U.S. Total: Livestock Marketing Information Center Data Source: USDA-NASS 01/27/12

28 Mil. Head JANUARY 1 BEEF COW FACTORY U.S., Annual Beef cows down mil Beef replacement heifers up mil Total beef cow factory down 2.5 % 40 Replacement Heifers Beef Cows

29 Thou. Head Beef cow slaughter +4% vs Slaughter as a % of inventory +0.3% BEEF COW SLAUGHTER Federally Inspected, Weekly Avg Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS C-S-34 07/12/13

30 Meat supplies were virtually unchanged for 2012 but will be up slightly in Projected 2014 Forecast 13 vs vs 13 Commodity BILLION POUNDS PERCENT CHANGE Beef % -5.08% Pork % 3.02% Total Red Meat* % -1.05% Broilers % 2.78% Total Poultry** % 3.15% Total Red Meat & Poultry % 0.97% Source: USDA-WASDE, July 2013 Report

31 PRICES, PROJECTIONS, AND OTHER PROGNOSTICATIONS

32 Projected Prices 2013 and Beyond $180 $160 $140 $120 $100 $80 $60 $ Source: USDA, LMIC and UGA SE 500# steer SE 750# steer Choice fed steer SE Slaughter cow

33 Cost of Production ($/Cwt.) Cost of production will be higher but should be manageable for most $ $ $ $ $ $ $ $95.00 $85.00 $75.00 Range of Expected Prices 2013 Expected Production Costs in 2013 Variable Costs Fixed Costs

34 MARKETING DECISIONS

35 $ Feeder Cattle Futures Prices $ $ $ $ $ $ April 2014 FC Futures Nov 2013 FC Futures $ $ $ $142.00

36 ,000 May 1 Hay Stocks and Ratio of Hay Stocks to Beef Cows ,000 25,000 20,000 15, , US Hay Stocks May 1 Tons of hay/beef cow Data source: USDA, NASS Compiled by LMIC Chart prepared by Dr. Curt Lacy, UGA

37

38

39

40 Price and Marketing Summary All current factors point to favorable prices for the fall and into If the 14b corn happens prices could improve in the fall, especially for heavier calves. If drought reoccurs in Plains, lighter weight calves could be discounted more than usual. In either case, stockering in the SE or retaining ownership this fall may make economic sense.

41 Beef Cattle Outlook Summary Tight Supplies +Good domestic demand +Good international demand = Favorable prices for the foreseeable future Corn prices Weather Domestic demand International economic situation

42 Beef Cattle Outlook R. Curt Lacy, Ph.D. Extension Economist-Livestock