Beef Cattle Outlook R. Curt Lacy, Ph.D. Extension Economist-Livestock University of Florida Beef Cattle Short Coourse

Transcription

1 Beef Cattle Outlook R. Curt Lacy, Ph.D. Extension Economist-Livestock 2012 University of Florida Beef Cattle Short Coourse

2 MED. & LRG. #1 & 2 STEER CALF PRICES Pounds, Georgia, Weekly $ Per Cwt Avg JAN APR Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC JUL OCT

3 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT Avg Livestock Marketing Information Center Data Source: USDA-AMS

4 BOXED BEEF CUTOUT VALUE Choice Lbs. Carcass, Weekly $ Per Cwt Avg JAN APR JUL OCT Livestock Marketing Information Center C-P-62 04/30/12 Data Source: USDA-AMS

5 $/Cwt PRIMAL VALUE Monthly Cutout Value Rib Loin Cutout Value Rib Loin Mar-11 Mar-12 Prime Branded Choice Select Ungraded Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

6 What Determines Price?

7 What Determines Price? Supply Price Demand Quantity

8 Factors Affecting Supply & Demand Supply Input prices Prices of alternative enterprises Technology Government Demand Population Income Tastes and preferences Prices of complements and substitutes

9 SUPPLY

10 BEEF COWS THAT CALVED JANUARY 1, 2012 (1000 Head) to to to to 4366 VT 10 NH 4 MA 7 RI 1 CT 5 NJ 8 DE 4 MD U.S. Total: Livestock Marketing Information Center Data Source: USDA-NASS 01/27/12

11 JANUARY 1 COW INVENTORY U.S., Annual Mil. Head = 29.9 Million Head -3.1 Percent 2012 = 9.2 Million Head +0.9 Percent Beef Dairy Livestock Marketing Information Center Data Source: USDA-NASS C-N-02 01/29/12

12 CHANGE IN BEEF COWS NUMBERS JANUARY 1, 2011 TO JANUARY 2012 (1000 Head) to -9-9 to 0 0 to to 113 VT 0 NH 1 MA 2 RI 0 CT 1 NJ -1 DE 0 MD 1-1 U.S. Total: -967 Livestock Marketing Information Center Data Source: USDA-NASS 01/27/12

13 Mil. Head HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, U.S % Livestock Marketing Information Center Data Source: USDA-NASS C-N-38 01/29/12

14 So when herd rebuilding begin? Mil. Head JANUARY 1 BEEF COW FACTORY U.S., Annual Beef cows down million Beef replacement heifers up million Total beef cow factory down 3.1 percent 40 Replacement Heifers Beef Cows C-N-02 01/29/

15 Meat production was slightly larger in 2011 but will be lower in Projected 2012 Forecast 11 vs vs 11 Commodity BILLION POUNDS PERCENT CHANGE Beef % -4.59% Pork % 2.17% Total Red Meat* % -1.37% Broilers % -1.78% Total Poultry** % -1.09% Total RedMeat & Poultry % -1.24% Source: USDA-WASDE, April 2012 Report

16 DEMAND

17 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

18 Restaurants are generally doing much better

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20 Euro Crisis Why is the Euro problem a problem? Considerable amount of world s capital in Europe. We are in a global economy. Psychology

21 2012 Corn Crop = So far so good Source: Daily Livestock Report

22 Tight Stocks Since 1995 in Feed Crops Despite Large Crops 14,000 12,000 10,000 8,000 US Corn Supply and Demand 50% 40% 30% 6, % 17.5% 20% 4,000 2, % 12.8% 13.9% 13.1% 8.6% 6.3% 10% 0 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 0% Ending Stocks Production Domestic Use and Exports Stocks:Use

23 More Corn Used for Ethanol as Energy Act Mandates Source: USDA WASDE Report, 11/9/ ,000 12,000 10,000 8,000 6,000 4,000 2, /97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Feed and Residual Ethanol Exports Food Seed and Other Industrial

24 Hit the 10% Blend Wall in the past year. Ethanol exports growing.

25 Demand Summary Beef Slow but steady growth in the US economy Situation in Europe remains a potential concern US debt and deficit situation still has potential to create some issues Election year promises, promises Cattle Corn market will continue to exert considerable influence over the market is shaping up to be a good production year. Overall good but not great demand

26 IMPORTS AND EXPORTS

27 Factors Affecting Imports And Exports Exchange rates Demand for the product Trade barriers

28 EXCHANGE RATE US Dollar base, Monthly Australia S. Korea Australia South Korea Livestock Marketing Information Center Data Source: Pacific Exchange Rate Service, Univ. of B.C., Compiled & Analysis by LMIC 04/02/12

29 U S BEEF AND VEAL EXPORTS Carcass Weight, Monthly Mil. Pounds JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Avg Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS I-N-16 04/19/12

30 Production, Imports, and Exports Beef Production (Bil. Lbs.) Beef Exports & Imports (Bil. LBS) Production Beef and Veal Exports Beef and Veal Imports

31 What of world cattle and beef numbers? Cattle (Thous. Hd.) 350, , , , , ,000 50, ,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Beef Production (MMT) Cattle Beef Production

32 Mill MT 2.5 BEEF AND VEAL EXPORTS Carcass Weight, Annual Brazil Argentina Uruguay US Livestock Marketing Information Center Data Source: USDA-FAS 04/18/12

33 PRICES, PROFITS AND RISK MANAGEMENT FOR 2012

34 Beef Supply and Utilization (millions of pounds) Beginning Stocks Production 26,414 26,309 25,150 Imports 2,297 2,056 2,455 Total Supply 29,276 28,950 28,205 Exports 2,299 2,788 2,725 Total Use 26,392 25,562 24,905 Ending Stocks Data source: USDA WASDE Table prepared by UGA

35 Projected Prices 2012 and Beyond $180 $160 $140 $120 $100 $80 $60 $ Source: USDA, LMIC and UGA GA 500# steer GA 750# steer Choice fed steer GA Slaughter cow

36 $ Per Cow COW-CALF RETURNS AND CATTLE INVENTORY U.S., Annual Mil. Head Cow-Calf Returns Cattle Inventory Jan C-P-67 11/17/11 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC

37 Cost of production will be higher but should be manageable for most Cost of Production ($/Cwt.) $ $ $ $ $ $ $ $95.00 $85.00 $75.00 Range of Expected Prices 2012 Expected Production Costs in 2012 Variable Costs Fixed Costs

38 There are opportunities to manage risk $/Cwt. $ $ $ $ $ $ $ $ $90.00 $80.00 CME Live and Feeder Cattle Futures Close for April 30, 2012 Feeder Cattle Futures Live Cattle Futures CME Feeder Cattle Futures Month

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

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

41 PRICES AND PROFITS

42 OTHER SLIDES

43 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 04/27/12

44 TOTAL COW SLAUGHTER Federally Inspected, Weekly Thou. Head Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS C-S-14 04/27/12

45 STEER DRESSED WEIGHT Federally Inspected, Weekly Pounds Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS C-S-18 04/27/12

46 $ Per Cwt WHOLESALE BONELESS BEEF PRICES Fresh, 90% Lean, Weekly Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS M-P-24 04/30/12

47 $ Per Cwt WHOLESALE BONELESS BEEF PRICES Fresh, 50% Lean, Weekly Avg JAN APR JUL OCT Livestock Marketing Information Center Data Source: USDA-AMS M-P-25 04/30/12