APPLIED PRICE FORECASTING

Transcription

1 APPLIED PRICE FORECASTING AGEC 344 AG PRICE ANALYSIS January 2014 Tim Petry Livestock Economist Applied-Price-Forecasting-Jan

2 If you read about something for only 1 hour a day, after 5 weeks you will be one of the world s leading authorities on that subject! Source: Pat Williams, Senior Vice President, Orlando Magic

3 Dickinson - Stockman's Livestock Exchange Cattle Prices source: FEEDER STEERS MEDIUM AND LARGE 1 MONTHLY AVERAGES Excel Spreadsheet N.D. Markets Feeder Cattle MO/YR Mar Apr May Jun Jul-03 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun-04 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun-05 Jul-05 Aug Sep Oct Nov Dec

4 A Picture is Worth 1000 Words 220 MED. FRAME #1 STEER CALF PRICES Pounds, N.D., Weekly JAN APR JUL OCT AVG Source: Livestock Market Information Center

5 Index Seasonal Price Patterns are the Most Important Price Prediction and Marketing Tool SEASONAL PRICE INDEX -- STEER CALVES Pounds, /20/13 Jan Mar May Jul Sep Nov Max. Index Avg. Index Min. Index Index SEASONAL PRICE INDEX -- FEEDER STEERS Pounds, /20/13 Jan Mar May Jul Sep Nov Max. Index Avg. Index Min. Index Index Livestock Market Information Center SEASONAL PRICE INDEX -- FED STEERS /20/13 Jan Mar May Jul Sep Nov Max. Index Avg. Index Min. Index

6 What causes seasonal price patterns? 1. Both supply and demand Supply Production (harvest) Carryover Imports Weather?

7 BARROW AND GILT SLAUGHTER Federally Inspected, Monthly Thou. Head H-S-01 01/24/ Avg JAN MAR MAY JUL SEP NOV Pounds AVG DRESSED WEIGHT - BARROWS & GILTS Federally Inspected, Monthly H-S-25 01/24/14 JAN MAR MAY JUL SEP NOV Avg

8 $ Per cwt JAN NET SLAUGHTER HOG PRICES National, Weighted Average Carcass Price, Weekly APR JUL OCT Avg H-P-24 01/27/14 FEEDER PIG PRICES 40 Pounds, Weekly $ Per Head JAN APR JUL OCT Avg H-P-01 01/27/14

9 USDA Provides Excellent Supply Info World Agricultural Supply & Demand Estimates (WASDE) Livestock, Dairy, Poultry Outlook Cattle on Feed Cattle Inventory Hogs and Pigs Sheep and Goats Market Reports

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11 U S TOTAL CORN SUPPLY AND PRICE Crop Year Bil. Bushels $ Per Bushel Supply Price Livestock Marketing Information Center G-NP-13 01/10/14 Data Source: USDA-NASS, Compiled & Forecasts by LMIC

12 Corn - Total Use (Billion Bushels) 7.00 Billion Bushels Feed & Residual Ethanol Non-Ethanol Food, Seed & Industrial Exports 0.00 Jan. 10, 2014 WASDE Report & USDA Feed Grains Data Base Table 4

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14 2. Demand Change is usually slow Consumer incomes Number of consumers Consumer tastes Consumer expectations Prices of related goods Substitutes/complements Domestic vs export

15 LMIC: Data Source: Bureau of Labor Statistics, Compiled & Analysis by LMIC Bil. Dollars TOTAL DISPOSABLE PERSONAL INCOME Quarterly Current Dollars Dollars LMIC, Data Source: Bureau of Economic Analysis 12/06/13 Million 350 TOTAL US POPULATION ESTIMATES Including Armed Forces Overseas, Annual (July 1) Actual Projected /06/13

16 Percent 11.0 U.S. UNEMPLOYMENT RATE Seasonally Adjusted, Quarterly Livestock Marketing Information Center Data Source: Bureau of Labor Statistics, Compiled & Analysis by LMIC 12/06/13

17 Consumer Tastes $ Per Cwt JAN WHOLESALE BEEF LOIN STRIP PRICES Boneless 0x1, Weekly APR JUL OCT Avg /27/14 $ Per Cwt LMIC: Data Source: USDA/AMS JAN WHOLESALE BONELESS BEEF PRICES Fresh, 90% Lean, Weekly APR JUL OCT Avg M-P-24 01/27/14

18 Cents Per Pound 125 TURKEY PRICES National Hens, 8-16 Pounds, Weekly Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS P-P-08 01/24/14

19 Mil. Lbs TURKEY PRODUCTION Federally Inspected, Weekly Avg JAN APR JUL OCT P-S-21 01/30/ Mil. Pounds TURKEY IN COLD STORAGE End of the Month JAN MAR MAY JUL SEP NOV P-S-04 01/23/14 Avg

20 Cents Per Pound 225 WHOLESALE CHICKEN WING PRICES Northeast, Truckload, Weekly Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS P-P-07 01/24/14

21 Cents Per Pound 225 WHOLESALE CHICKEN WING PRICES Northeast, Truckload, Weekly 200 Avg JAN APR JUL OCT 2014 P-P-07 01/24/14 Cents Per Pound JAN Livestock Marketing Information Center: Data Source: USDA-AMS WHOLESALE CHICKEN BREAST PRICES Skinless/Boneless, Northeast, Truckload, Weekly APR JUL OCT P-P-02 01/24/14 Avg

22 Competing Meats - Substitutes Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC BARROW AND GILT PRICES Iowa - So. Minnesota, Carcass Base Price, Weekly BROILER PRICES National Composite, Weekly $ Per Cwt Avg Cents Per Pound Avg JAN APR JUL OCT 2014 H-P-09 01/27/14 SLAUGHTER LAMB PRICES National Direct, Hot Carcass, Weekly JAN APR JUL OCT 2014 P-P-01 01/24/14 $ Per Cwt JAN APR JUL OCT Avg S-P-03 01/27/14

23 Beef Exports

24 Complements WHOLESALE PORK BELLY PRICES Skin-on, Pounds, Weekly $ Per Cwt Avg JAN APR JUL OCT LMIC: Data Source: USDA-AMS M-P-29 01/27/14

25 High (Low) Prices Cure High (Low) Prices Dollars ANNUAL AVERAGE HOG PRICES National Slaughter Hog ($/cwt) 40 Lb Feeder Pig ($/Hd) Lb Feeder Pig ($/Hd) Livestock Marketing Information Center Data Source: USDA-AMS 02/15/13

26 Volatile Ag Prices FEEDER LAMB PRICES 3-Market Average; CO, TX & SD; Weekly $ Per Cwt Avg JAN APR JUL OCT

27 What will 2014 cattle prices be?

28 Photo courtesy of Judy Jacobson, Watford City Cattle Situation and Outlook Tim Petry Livestock Economist February 3, 2014 CarringtonFC-Feb2014.pptx

29 All beef cattle market classes broke price records in 2011 and 2012 also wholesale beef prices retail beef prices How about? What could derail prices? 2014?

30 Livestock Price and Production Patterns 1. Seasonal 3. Long term 2. Cycle 4. Unexpected LFTB

31 What a Difference

32 Is the Cattle Cycle Dead? When will beef cow slaughter decline? When will beef herd rebuilding start?

33 BEEF COW SLAUGHTER Federally Inspected, Weekly Thou. Head Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS C-S-34 12/27/13

34 Mil. Head 7.0 HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, U.S C-N-38 02/04/13 Mil. Head JANUARY 1 FEEDER CATTLE SUPPLIES Residual, Outside Feedlots, U.S Livestock Marketing Information Center; Data Source: USDA/NASS C-N-30 02/04/13

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

36 CHANGE IN BEEF COWS NUMBERS JANUARY 1, 2012 TO JANUARY (1000 Head) to to -1-1 to 4 4 to 79 VT 2 NH -1 MA -1 RI 0 CT 2 NJ 1 DE 1 MD -2-8 U.S. Total: -862 Livestock Marketing Information Center Data Source: USDA-NASS 02/04/13

37 CHANGE IN BEEF COWS NUMBERS JANUARY 1, TO JANUARY 2014 (1000 Head) to to -1-1 to 3 3 to 87 VT 0 NH -1 MA -1 RI 0 CT -2 NJ -1 DE -1 MD -3-1 Livestock Marketing Information Center Data Source: USDA-NASS 02/03/14

38 Source: Beef Magazine

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40 NOV FC vs DEC CORN 2012

41 NOV FC vs DEC CORN

42 Omaha Corn Prices Weekly $ per bu JAN APR JUL OCT Avg Avg Livestock Marketing Information Center Data Source: USDA-AMS G-P-02

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

44 MED. & LRG. #1 FEEDER STEER PRICES Pounds, N.D., Weekly JAN APR JUL OCT Fut AVG2

45 SF_LS796 Sioux Falls, SD Fri Jan 31, 2014 USDA-ND Dept of Ag Market News North Dakota Weekly Auction Summary - For the week ending Feb 1, 2014 Receipts: 15,996 Last Week 13,888 Last Year 7,449 Combined results of 4 auctions this week: Kist, Napoleon, Stockmens, and West Fargo. Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Value Added Fleshy Calves Fancy Fleshy Fancy Value Added

46 SF_LS796 Sioux Falls, SD Fri Jan 31, 2014 USDA-ND Dept of Ag Market News North Dakota Weekly Auction Summary - For the week ending Feb 1, 2014 Receipts: 15,996 Last Week 13,888 Last Year 7,449 Combined results of 4 auctions this week: Kist, Napoleon, Stockmens, and West Fargo. Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Thin Fleshed Fleshy Replacement Fleshy Fleshy Fleshy

47 CATTLE ON FEED US Total, Monthly Mil. Head Avg. 2007/ JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Livestock Marketing Information Center Data Source: USDA-NASS C-N-10 01/24/14

48 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT 2014 Futures Avg Livestock Marketing Information Center Data Source: USDA-AMS

49 Slaughter Cow Prices 85-90% Lean, Weekly $ Per Cwt Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS C-P-35 01/27/14

50 ANNUAL AVERAGE CATTLE PRICES $ Per Cwt lb Steer Calves lb Feeder Steers Fed Steers Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC C-P-06 11/26/13

51 Historic and Projected Planning Prices for North Dakota Beef Year lb. Steers lb. Steers lb. Steers lb. Steers lb. Steers 1,100-1,700 lb. Cull Cows 5-Area Direct Slaughter Steers 2012 Prediction Actual Prediction Actual ?? Prediction

52 End of Rainbow for the Next Several Years Questions?