Cattle Market Outlook

Transcription

1 Cattle Market Outlook Winter C. Wilson Gray District Economist Twin Falls R & E Center wgray@uidaho.edu Thank You! Topics: Markets and Aspects of Domestic Consumer Beef Demand International Trade Comments Drought A Game Changer Markets and Outlook Feedstuffs are Key Poultry and Pork Cattle Market Drivers Cattle Prices and Profitability Economic Environment Summary US Consumer Demand and Consumption (Disappearance) USDA Data Sources NASS, AMS, FAS, and ERS All Forecasts LMIC & UI - AERS 1

2 Percent Change QTRLY GROSS DOMESTIC PRODUCT (GDP) Real Dollar (25) Change from Previous Quarter Dollars PER CAPITA DISPOSABLE PERSONAL INCOME Quarterly Current Dollar 25 Dollar Data Source: Dept. Commerce-BEA Data Source: Department of Commerce-BEA Index Value RETAIL ALL FRESH BEEF DEMAND INDEX Fourth Quarter, Using CPI 199= Pounds 7 65 U S BEEF CONSUMPTION Per Capita, Retail Weight, Annual Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC , Compiled & Analysis by LMIC M-C-15 3/1/13 2

3 U S RED MEAT & POULTRY CONSUMPTION Per Capita, Retail Weight, Annual U S EXPENDITURES FOR MEAT & POULTRY Per Capita, By Type of Meat, Annual Pounds 2 Turkey Nominal Dollars 3 25 Beef 15 Total Chicken Pork 2 15 Pork Broiler 5 Beef 5 Turkey M-C-1 3/1/13 M-C-16B 3/1/13, Compiled & Analysis by LMIC Data Source: Bureau of Economic Statistics & USDA-ERS, Compiled & Analysis by LMIC CPI - MEATS Base, Monthly Index Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec International Trade Perspective Data Source: Bureau of Labor Statistics 2/1/13 3

4 U S BEEF AND VEAL EXPORTS Carcass Weight, Monthly U S BEEF EXPORTS TO MAJOR MARKETS Carcass Weight, Monthly Mil. Pounds JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Mil. Pounds Japan Canada Mexico South Korea I-N-16 2//13 I-N-35 2//13 Data Source: USDA-ERS & USDA-FAS Data Source: USDA-ERS & USDA-FAS Bil. Pounds 3. U S BEEF AND VEAL EXPORTS Carcass Weight, Annual Bil. Pounds 4. U S BEEF AND VEAL IMPORTS Carcass Weight, Annual Data Source: USDA-FAS and ERS, Forecasts by LMIC Data Source: USDA-FAS and ERS, Forecasts by LMIC 4

5 Percent U S BEEF AND VEAL NET IMPORTS As a Percentage of Production, Carcass Weight, Annual Thou. Head FEEDER CATTLE IMPORTS FROM MEXICO Weekly JAN APR JUL OCT 27-2 Data Source: USDA-FAS and ERS, Forecasts by LMIC Data Source: USDA-AMS & USDA-APHIS 3/4/13 Thou. Head FEEDER CATTLE IMPORTS FROM CANADA Weekly JAN APR JUL OCT 27-2 Drought A Game Changer Data Source: USDA-AMS & USDA-APHIS 3/4/13 5

6 Feedstuffs are Key $ Per Bu CORN - MONTHLY AVERAGE PRICE Received by Farmers, U.S., Crop Year SEP NOV JAN MAR MAY JUL 6/7-1/ 2/12 /13 U S TOTAL CORN SUPPLY AND PRICE Crop Year Bil. Bushels $ Per Bushel Supply Price G-P-9 2/28/13 G-NP-13 2/8/13, Compiled & Forecasts by LMIC 6

7 U.S. CORN DISAPPEARANCE AND STOCKS Crop Year DECEMBER 1 HAY STOCKS ( Tons) Bil. Bushels Stocks Exports Food, Seed & Industrial Feed & Residual VT NH MA RI CT NJ DE MD to to to to 6 47 G-NP-12 2/8/13, Compiled & Forecasts by LMIC 1/15/ ALL HAY ACRES ( Acres) PERCENT CHANGE ALL HAY ACRES (-2) 78 % VT NH MA RI CT NJ DE MD to to to to to % -3% -8% -19% -1% -22% -13% -1% 4% 2% -12% -13% 4% 38% 15% 28% -4% -9% 16% -3% % -2% -2% 7% -6% -2% -5% -2% 3% -6% -15% 4% 7% 4% -17% -2% 8% 23% -2% -% to -8% -8% to -2% -2% to % % to 7% 7% to 39% VT 6% NH -2% MA -7% RI -% CT -3% NJ % DE 7% MD -7% 1/15/ 1/15/ 7

8 Mil. Tons 12 U S HAY STOCKS AND PRODUCTION Crop Year December 1 Hay Stocks $ Per Ton ALFALFA HAY - MONTHLY AVERAGE PRICE Received by Farmers, U.S., Crop Year 6/7- /12 8 Alfalfa Hay Production 18 2/12 6 Other Hay Production / MAY JUL SEP NOV JAN MAR 1//13 G-P-12 2/28/13, Compiled & Forecasts by LMIC Poultry and Pork BROILER EGGS SET Weekly Mil. Eggs JAN APR JUL OCT P-S-1 3/7/13 8

9 SOW SLAUGHTER Federally Inspected, Weekly Cattle Market Thou. Head JAN APR JUL OCT Data Source: USDA-AMS & USDA-NASS H-S-15 3/1/13 Mil. Head TOTAL CATTLE INVENTORY BY CYCLE U.S., January CHANGE IN BEEF COWS NUMBERS JANUARY 1, TO JANUARY ( Head) to to -1-1 to 4 4 to 79 VT 2 NH -1 MA -1 RI CT 2 NJ 1 DE 1 MD -2, Compiled & Analysis by LMIC C-N-4 2/1/13-8 U.S. Total: /4/13 9

10 CHANGE IN BEEF COWS NUMBERS JANUARY 1, 23 TO JANUARY ( Head) VT 3 NH 28 MA 1-1 RI 28 CT -36 NJ DE - MD to to to to Mil. Head JANUARY 1 TOTAL CATTLE INVENTORY U.S., Annual = 89.3 Million Head -1.6 Percent U.S. Total: C-N-1 2/1/13 2/4/13 Mil. Head 7. HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, U.S. Thou. Head 85 BEEF COW SLAUGHTER Federally Inspected, Weekly % JAN APR JUL OCT C-N-38 2/1/13 C-S-34 3/1/13 Data Source: USDA-AMS & USDA-NASS 1

11 Pounds 81 CATTLE DRESSED WEIGHT Federally Inspected, Weekly Mil. Head 12 CALF PRICES AND CATTLE INVENTORY Western Kansas 5-6 Lb. Steers, Annual $ Per Cwt Cattle Inventory JAN APR JUL OCT Calf Price C-S-18A 3/1/13 C-N-41 2/1/13 Data Source: USDA-AMS & USDA-NASS Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC Mil. Head 4 JANUARY 1 FEEDER CATTLE SUPPLIES Residual, Outside Feedlots, U.S. Mil. Head CATTLE ON FEED US Total, Monthly 27/ JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC C-N-3 2/4/13 C-N-1 2/22/13

12 Mil. Head BEEF PRODUCTION vs. CATTLE INVENTORY Inventory on January 1, U.S. Bil. Pounds 28 Commercial Beef Production Bil. Pounds COMMERCIAL BEEF PRODUCTION Quarterly 27/ Total Cattle Inventory JAN-MAR APR-JUN JUL-SEP OCT-DEC 214, Compiled & Analysis by LMIC M-S-23 2/17/13, Forecasts by LMIC $ Per Cwt ANNUAL AVERAGE CATTLE PRICES Southern Plains WA-OR-ID 5-6 WT lb Steer Calves 7-8lb Feeder Steers Fed Steers Steer Price Range projection Data Source: USDA-AMS, Compiled & Analysis by LMIC C-P-6 2/14/13 12

13 WA-OR-ID 7-8 WT Steer Price Range projection $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly 85 JAN APR JUL OCT 27-3/4/13 Data Source: USDA-AMS Price Commercial\Utility Cows Producers Auction, Jerome, ID $ Per Cow COW-CALF RETURNS AND CATTLE INVENTORY U.S., Annual Mil. Head Cow-Calf Returns Yr. Average Cattle Inventory Jan AGECONGRAPHICS Data Source: Producers Auction, Jerome, ID Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC C-P-67 12/18/12 13

14 LMIC QUARTERLY FORECASTS Prices Adjusted to PNW by UI Ag Economics 2/8/ PNW Comm'l % Chg. % Chg. Live Sltr. % Chg. Feeder Steer Price Year Beef from Per Capita from Steer Price from PNW Region Quarter Production Year Ago Consumption Year Ago 5-Mkt Avg Year Ago 7-8# 5-6# (Mil. Lbs.) (Retail Wt.) ($/Cwt.) ($/Cwt.) I c II III IV Year I c II III IV Year a Totals may not add due to rounding. $ Per Cwt CHOICE STEER PRICE vs BREAKEVEN Cattle Feeding, S. Plains, Monthly Latest Data: January Steer Price Breakeven Projected Breakeven b Projected/Estimated quarter Sources: Livestock Slaughter - USDA/NASS; Steer Prices - USDA/AMS Livestock Market News; Projections and Forecasts by LMIC and UI Ag Econ Ext. Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC C-P-21 2/22/13 $ Per Head AVERAGE RETURNS TO CATTLE FEEDERS Feeding 725 Lb. Steers, S. Plains, Monthly Latest Data: January Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC C-P-22 2/22/13 Economic Environment. Domestic Consumer Demand has Stabilized and is Slowly Improving for Red Meats. Recession versus +3% GDP Growth? Foreign Beef Demand Strong but Slipping Price Volatility Will Continue (Globalization, Ethanol, etc.) Market Shocks Will Continue (9--21; BSE; 28 Credit Crisis) Market Segmentation Accelerating Economic Incentive to Grow U.S. Cowherd Overcome by Drought Controls Already Set to Dramatically Reduced Beef Output High Feedstuff Price Range Expected to Continue Headwind to Calf and Yearling Prices -- Compressed Margins for Cattle Feeders and Beef Packers Mistakes Are Costly, Sound Business Practices Required Agile Firms Will Benefit. Be Adaptable NOT Adapted Management is a Sequential Decision-Making Process, Especially in Drought 14

15 29 land Grant Universities: USDA Members: ERS APHIS GIPSA NASS WAOB AMS Associate Members: AFBF ASI NCBA NPB CME-Group Canadian Consortium Noble Foundation CoBank TCFA CWB TCU Change is inevitable; adaptation and survival are optional. -Dee Likes Kansas Livestock Association Happy Trails in THANK YOU! 15