Beef Cattle Outlook Dr. Curt Lacy Extension Economist-Livestock University of Georgia Florida...
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Transcript of Beef Cattle Outlook Dr. Curt Lacy Extension Economist-Livestock University of Georgia Florida...
Beef Cattle Outlook
Dr. Curt LacyExtension Economist-Livestock
University of Georgia Florida Cattlemen’s Institute
January 26, 2012
Overview
• Recent Trends• Outlook for 2012 and beyond• Marketing Alternatives
MED. & LRG. #1 & 2 STEER CALF PRICES500-600 Pounds, Georgia, Weekly
90
100
110
120
130
140
150$ Per Cwt.
Avg.2006-010
2011
2012
01/18/12Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC
2010
MED. & LRG. #1 & 2 FEEDER STEER PRICES700-800 Pounds, Georgia, Weekly
70
80
90
100
110
120
130$ Per Cwt.
Avg.2006-010
2011
2012
01/18/12Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC
SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly
80
85
90
95
100
105
110
115
120
125
130
JAN APR JUL OCT
$ Per Cwt.
Avg.2006-10
2011
2012
Livestock Marketing Information CenterData Source: USDA-AMS
BOXED BEEF CUTOUT VALUEChoice 600-900 Lbs. Carcass, Weekly
135
145
155
165
175
185
195
205
JAN APR JUL OCT
$ Per Cwt.
Avg.2006-10
2011
2012
C-P-6201/23/12
Livestock Marketing Information CenterData Source: USDA-AMS
CHOICE MINUS SELECT BEEF PRICESCarcass Cutout Value 600-900 Lbs., Weekly
0
2
4
6
8
10
12
14
16
18
20
JAN APR JUL OCT
$ Per Cwt.
Avg.2006-10
2011
2012
C-P-6801/23/12
Livestock Marketing Information CenterData Source: USDA-AMS, Compiled & Analysis by LMIC
5 THINGS SHAPING MARKETS TODAY AND FOR 2012
BEEF COW SLAUGHTERFederally Inspected, Weekly
45
50
55
60
65
70
75
80
85
90
95Thou. Head
Avg.2006-10
2011
2012
C-S-3401/20/12Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
2011 Beef Cow Slaughter Ca. 3.8 million
U S BEEF COW INVENTORYvs FI BEEF COW SLAUGHTER
Annual
30
31
32
33
34
35
36
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Mil. Head
2.4
2.7
3.0
3.3
3.6
3.9
4.2Mil. Head
Beef CowInventory
FI BeefCowSlaughter
C-S-2801/28/11Livestock Marketing Information Center
Data Source: USDA-NASS
U S BEEF COW INVENTORY CHANGEvs FI BEEF COW SLAUGHTER
As a Percent of Total Cow Inventory, Annual
-2
-1.5
-1
-0.5
0
0.5
1
1.5
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Mil. Head
6.5
7.5
8.5
9.5
10.5
11.5
12.5
13.5Percent
Beef CowInventoryChange
Slaughteras % ofInventory
C-S-28A01/28/11
Livestock Marketing Information CenterData Source: USDA-NASS
Source: DTN/Telvent
TOTAL U.S. EXPORTS OF BEEF MUSCLE CUTS
Weekly
4
6
8
10
12
14
16
18
20
22
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
1000 MT
12/29/11Livestock Marketing Information CenterData Source: USDA-FAS
OUTLOOK FOR 2012 AND BEYONDWhat can we expect this year and next?
BEEF COWS THAT HAVE CALVEDJANUARY 1, 2011
(1000 Head)
880 to 5,030 (12)450 to 880 (11)160 to 450 (13)
0 to 160 (14)
C-N-1501/28/11
659Alaska
Hawaii
US Total
5.1
180 928
600727
CT 4
DE 3.5
926
502
79
446
352213
840
1478 1023
461
13
MD 42
MA 699
360
495
1865
1476
1772237
NJ 9
488
90
351
880
290
2036
549
157RI 1.5
184
1610
990
5025
333
VT 10
675
233
200
265
694
30865
Livestock Marketing Information CenterData Source: USDA/NASS
NH 3
CALF CROPJuly 1 Estimates, U.S., Annual
35
37
39
41
43
45
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011
Mil. Head
C-N-18B07/22/11
-0.5 Percent
2011 = 35.5 Million Head
Livestock Marketing Information CenterData Source: USDA-NASS
Meat supplies were slightly larger in 2011 but will be lower in 2012
Source: USDA-WASDE, January 2012 Report
20102011
Projected2012
Forecast 11 vs 10 12 vs 11
Beef 26.41 26.30 25.08 -0.42% -4.86%Pork 22.46 22.78 23.21 1.40% 1.85%Total Red Meat* 49.18 49.37 48.58 0.38% -1.63%Broilers 36.52 36.84 36.11 0.87% -2.02%Total Poultry** 42.59 43.09 42.39 1.16% -1.65%Total RedMeat & Poultry 91.77 92.46 90.97 0.75% -1.64%
BILLION POUNDS PERCENT CHANGECommodity
Tight Stocks Since 1995 in Feed Crops Despite Large Crops
04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/120
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0%
10%
20%
30%
40%
50%
19.8%17.5%
11.6% 12.8% 13.9% 13.1%
5.4% 6.7%
Ending Stocks Production Domestic Use and Exports Stocks:Use
US Corn Supply and Demand
Economic (Demand)Outlook
• Positives– Low interest rates– Little inflation pressure– Generally strong
corporate balance sheets– Recently improving
hiring prospects
• Negatives– Uncertainty over
European situation– Federal debt/deficit– Political uncertainty
Projected Prices 2011 and Beyond
2010 2011 2012 2013$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
GA 500# steer GA 750# steer Choice fed steer GA Slaughter cow
Source: USDA, LMIC and UGA
INPUTS, PROFITS AND RISK MANAGEMENT FOR 2012
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-100
-50
0
50
100
150
90000
95000
100000
105000
110000
115000
COW-CALF RETURNS AND CATTLE INVENTORY
U.S., Annual
Cow-Calf Returns
Cattle In-ventory Jan 1
$ Per Cow Mil. Head
C-P-6711/17/11
Livestock Marketing Information CenterData Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Don’t look for fertilizer prices to go down
Date 7/28/2008 1/12/2009 6/29/2009 12/7/2009 5/10/2010 11/1/2010 4/4/2011 9/5/2011 $-
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
Fertilizer Prices 2002-2011
Ammonium NitrateDAP (Diammonnm Phospate)Potash
$/to
n
Feedstuffs will be higher also
3/3/2
008
5/6/2
008
7/9/2
008
9/11/2
008
11/14/2
008
1/17/2
009
3/22/2
009
5/25/2
009
7/28/2
009
9/30/2
009
12/3/2
009
2/5/2
010
4/10/2
010
6/13/2
010
8/16/2
010
10/19/2
010
12/22/2
010
2/24/2
011
4/29/2
011
7/2/2
011
9/4/2
011
11/7/2
011 $-
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
Weekly Average Feed Prices
Whole Cottonseed
Corn Gluten Pellets
Soybean Hull Pellets
2 Yellow Corn
Dolla
rs P
er T
on
Cost of production will be higher but should be manageable for most
2012$75.00
$85.00
$95.00
$105.00
$115.00
$125.00
$135.00
$145.00
$155.00
$165.00
Variable Costs Fixed Costs
Expected Production Costs in 2012
Cost
of P
rodu
ction
($/C
wt.) Range of Expected Prices
There are opportunities to manage risk
Feb-12
Mar-
12
Apr-12
May
-12
Jun-12
Jul-1
2
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
$80.00 $90.00
$100.00 $110.00 $120.00 $130.00 $140.00 $150.00 $160.00
CME Live and Feeder Cattle Futures Close for January 25, 2012
Feeder Cattle FuturesLive Cattle Futures
CME Feeder Cattle Futures Month
$/Cw
t.
Beef Cattle Outlook Summary
Fewer cows = less beef-less competing meats+slowly improving economyHigher Prices in 2011
Beef Cattle Outlook
R. Curt Lacy, Ph.D.Extension Economist-Livestock
www.secattleadvisor.com
Can we produce enough beef?
19201923
19261929
19321935
19381941
19441947
19501953
19561959
19621965
19681971
19741977
19801983
19861989
19921995
19982001
20042007
2010 -
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
25,000,000.00
30,000,000.00
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Beef Cows vs. Beef Production USA, 1920-2011
Prod (mil) Beef Cows
Poun
ds o
f Bee
f Pro
ducti
on