Economic Outlook of Beef Cattle

Transcription

1 Economic Outlook of Beef Cattle Stan Bevers Professor & Ext. Economist Texas A&M AgriLife Extension Service Vernon, Texas University of Florida Beef Cattle Short Course Gainesville, Florida May 4, 2016

2 Experts often possess more data than judgement. Mr. Colin Powell Former US Secretary of State Retired Four Star General, US Army Statesman and author

3 30,000 Foot View of the Industry

4 U.S. Beef Cow Inventory January 1 45 Million Head

5 BEEF COWS THAT HAVE CALVED JANUARY 1, 2016 (1000 Head) ,000 to 4, to 1,000 Alaska to 500 Hawaii to to 100 U.S. Total 30,330.8

6 BEEF COWS THAT HAVE CALVED JANUARY 1, 1980 (1000 Head) Alaska 2.4 Hawaii 83.0 U.S. Total 36, ,000 to 5, to 1, to to to 100

7 CHANGE IN BEEF COW INVENTORY JANUARY 1, 1980 TO JANUARY 1, 2016 (1000 Head) k plus -1, k to -250k Alaska k to -100k Hawaii to -50k Increased U.S. Total -6,643

8 U.S. Calf Crop 50 Million Head

9 So Then, What Happened to Lower Feedlot Numbers and Being Current?

10 Cattle on Feed Million Head Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

11 FI Slaughter Weights Pounds Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

12 Daily Livestock Report, November 12, 2015

13 FI Carcass Weights Pounds Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14 FI Carcass Weights Pounds lbs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

15 Cattle Slaughter/Carcass Weights

16 On Feed Inventories & Slaughter Weights On Feed Slaughter Weight Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

17 What Happened to Lower Feedlot Numbers and Being Current? It s not a loss until you sell Renegotiation of bank loans Cost of gains were cheap in the MW Cost to maintain a high occupancy rate

18 Cattle on Feed - Placements Million Head Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

19 Cattle on Feed - Marketings Million Head Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

20 Total Meat Supplies

21 U.S. Commercial Beef Production Billion Pounds USDA-WASDE

22 U.S. Commercial Pork Production Billion Pounds USDA-WASDE

23 U.S. F.I. Broiler Production Billion Pounds USDA-WASDE

24 Red Meat and Poultry in Cold Storage Combined in Refrigerated Warehouses 2,500 5 Year Average ,400 2,300 Million Pounds 2,200 2,100 2,000 1,900 1,800 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec USDA-NASS

25 Demand for Beef

26 Retail Beef Prices (Monthly) $ Per Cwt All Fresh Choice

27 Annual Retail All Fresh Beef Domestic Demand Index Index

28 Beef Imports/Exports Imports Exports Million Pounds

29 US Dollar Index

30 4000 Beef Imports/Exports Since 2003 BSE Imports Exports Million Pounds

31 Feed Costs

32 US Hay Stocks (on Dec. 1) Million tons

33 US Corn Supply & Demand Ten Year Average = 1.418; 2015/16 Projections = Production Imports Domestic Use Exports Ending Stocks S/U Ratio 16, , , Million Bushels 10,000 8,000 6, Percent 4, , As of April 12, 2016, USDA-WAOB

34 US Corn Supply & Demand Ten Year Average = 1.418; 2015/16 Projections = Production Imports Domestic Use Exports Ending Stocks S/U Ratio 16, , , Million Bushels 10,000 8,000 6, Percent 4, , As of April 12, 2016, USDA-WAOB

35 World Corn Supply & Demand Ten Year Average = 5.653; 2015/16 Projections = Production Use Ending Stocks S/U Ratio 40, , , Million Bushels 25,000 20,000 15, Percent 10, , As of April 12, 2016, USDA-WAOB

36 Cash Corn Price $8.50 $8.00 $7.50 $7.00 $6.50 $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $

37 Cattle & Beef Prices

38 $175 Slaughter Steer Prices year 2014 From March 2015 to EOY15, slaughter steers lost $700/head in value. 109 $ $ $ $ $ $ Cattle Fax Data

39 $ Lbs Steer Prices Year From March 2015 to October 2015, feeder steers lost $600/head in value. 110 $ $ $ $ Cattle Fax Data

40 CME Feeder Cattle Index pound steers $250 $200 $150 $

41 450 Lbs Steer Prices Year $330 $1,400/head 115 $ $ $ $210 $950/head 95 $ $ Cattle Fax Data

42 $140 Utility Cow Prices Year 115% $ % $ % $95 100% $80 95% $65 90% $50 85% Cattle Fax Data

43 Boxed Beef Prices Year $ % $ % $ % $190 95% $165 90% Cattle Fax Data

44 What Does All of This Mean to You?

45 2016 Actual/Futures Prices P Live Live P Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

46 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 $1.00 Cattle Price Projections USDA 2016 Agricultural Outlook Conference Long Term Projections Per Head Local Weaned Calves OKC Steers $1,200 $1,000 $800 $600 $400 $200 $-

47 Summary Peak prices in Expected prices to slowly decline beginning in 2015; However, October 2015 through April 2016 was very problematic. Beef market continues to work itself out of this Feed (corn & hay) should be plentiful. Beef demand continues to be strong Beef exports being hampered by strength of the US dollar, but may be changing. Longer term, expect lower prices for the next three years; question is where is the bottom?

48 Stan Bevers Texas AgriLife Extension Service ext Questions/Comments