Cattle and Beef Markets: 2016 and beyond Kate Brooks Department of Agricultural Economics kbrooks4@unl.edu
Key Factors in 2016 Crops/Feedstuffs good for the industry. Expansion where we headed? Beef production available supplies & weights. Competing meats- how do they fit? Consumer demand been good will it continue? International trade is it weakening? Other factors/considerations???
Data Source: USDA-AMS Livestock Marketing Information Center G-P-02 12/18/15
Average Cash Rental Rate for Pasture: (Cow-Calf Pair / Month) 2015 Nebraska Farm Real Estate Market Highlights
Data Source: USDA-AMS
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center 01/04/16
Expansion (How Fast, How Long) Weather patterns Drought effects pastures & crops Cow-calf returns Increased beef supply = declining prices
Data Source: USDA-AMS Livestock Marketing Information Center C-P-35 01/04/16
53% in 2014 Data Source: USDA-AMS, Compiled by LMIC, Analysis Kate Brooks Livestock Marketing Information Center
47% in 2014 Data Source: USDA-AMS, Compiled by LMIC, Analysis Kate Brooks Livestock Marketing Information Center
Historically High Returns 2014 & 2015 2016? 2015: $342 2016: $254 Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center C-P-66 11/24/15
Historically High Returns 2014 & 2015 2016? 2015: $301 2016: $200 Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center C-P-66 01/04/16
What happens after high returns?
What Happens after High Returns? Data Source: USDA-AMS & USDA-NASS, Compiled and Analysis by LMIC Livestock Marketing Information Center C-P-67 01/04/16
Where will cow numbers go from current levels? U.S. Beef Industry Jan 1 Number of Beef Cows
USDA Projected Beef Cow Inventory http://www.usda.gov/oce/commodity/projections/index.htm Yr-over-Yr Changes: 2016: +2.4% 2017: +1.4% 2018: +1.6% 2019: +1.6%
Regional Beef Cow Numbers 2014 2015 % Change Great Plains 8659 8744 + 0.98% West 2951 2927-0.81% Corn Belt 4259 4395 + 3.19% S. Plains 5705 6080 + 6.57% Southeast 6227 6260 + 0.53% U.S. 29,085 29,693 + 2.1%
In the Cattle Markets Feb 16, 2015
-19% -8% +0.3%
In the Cattle Markets Feb 16, 2015 +1.7% -15.7% -2.3%
Beef Cows, Millions of Head Replacement Heifers, Thousands of Head Nebraska Beef Industry Jan 1 Number of Beef Cows & Heifers 2 1.95 1.9 1.85 1.8 1.75 1.7 Beef Cows: 1.79 million head Heifers (21.8% of beef cow herd) - 2.5% 410 390 370 350 330 310 290 270 1.65 250 Heifers Beef Cows Data Source: USDA NASS
Acres, millions Total Pastureland in Nebraska 25 24 5% decline since 2002 23 22 21 20 19 18 1987 1992 1997 2002 2007 2012 Pastureland (Excl crop & woodland) Cropland used pasture Woodland pastured
Cropland Used for Pasture in NE 2012: 322,093 acres 63% decline
Weaned Calves? Precondition programs/stocker calves VOG vs. COG Economic profit per head Risk level - ROI Cornhusker Economics Article: Annual & Seasonal Price Patterns for Cattle NebGuide G2248: Economic Considerations for Preconditioning Calves for Feedlots
Economic Outlook: Feedlots Latest Data: November 2015 Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center C-P-22 12/15/15
Data Source: USDA-AMS Livestock Marketing Information Center 01/04/16
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center C-S-18 12/31/15
LMIC Quarterly Forecasts (1/04/16) % Chg. Average % Chg. Comm'l % Chg. Year Comm'l from Dressed from Beef from Quarter Slaughter Year Ago Weight Year Ago Production Year Ago (1,000 Head) (Lbs.) (Mil. Lbs.) 2015 I 6967-5.5 813 2.2 5664-3.5 II 7227-7.8 810 2.7 5855-5.3 III 7288-4.5 832 2.8 6066-1.8 IV b 7261-0.9 841 2.4 6109 1.5 Year 28743-4.7 824 2.5 23694-2.3 2016 I c 7113 2.1 821 1.0 5841 3.1 II 7332 1.5 813 0.4 5964 1.9 III 7624 4.6 836 0.4 6370 5.0 IV 7530 3.7 840-0.2 6325 3.5 Year 29599 3.0 828 0.4 24500 3.4 2017 I 7430 4.5 827 0.8 6148 5.3 II 7638 4.2 818 0.6 6249 4.8 III 7823 2.6 839 0.4 6563 3.0 IV 7856 4.3 842 0.3 6618 4.6 Year 30747 3.9 832 0.5 25578 4.4
LMIC Quarterly Forecasts (1/04/16) Live Sltr. % Chg. Feeder Steer Price Year Steer Price from Southern Plains d Quarter 5-Mkt Avg Year Ago 7-800# 5-600# ($/Cwt.) ($/Cwt.) 2015 I 162.43 11.0 215.87 276.14 II 158.11 7.0 225.29 279.32 III 144.22-9.0 214.38 246.04 IV 127.06-23.3 177.29 203.51 Year 147.95-4.2 208.21 251.25 2016 I 136-139 -15.3 165-169 195-200 II 139-143 -10.8 167-172 198-205 III 133-138 -6.0 162-168 200-208 IV 131-137 5.5 159-166 191-200 Year 135-139 -7.4 163-169 196-203 2017 I 132-139 -1.5 159-167 194-204 II 133-141 -2.8 160-169 196-208 III 127-136 -3.0 156-166 189-202 IV 127-137 -1.5 153-165 183-197 Year 131-137 -2.2 159-165 193-200
Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC Livestock Marketing Information Center I-N-06 01/04/16
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC Livestock Marketing Information Center I-N-07 01/04/16
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC Livestock Marketing Information Center I-N-12 01/04/16
Production/Retail Prices
2016:+3.4 2016: +1.3 2016: +2.2 Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: Bureau of Labor Statistics & USDA-ERS Livestock Marketing Information Center M-P-11 11/18/15
Other Issues/Thoughts Capacity of Industry vs. Herd Size Disconnects in voting & buying Public Acceptance Global trade issues/acceptance Politics Presidential Election Year
Thank You! kbrooks4@unl.edu Website: farm.unl.edu Twitter: @kbrooksunl Photo taken by Troy Waltz