Economic Outlook: Heidi Klum or The Witch of the West?
description
Transcript of Economic Outlook: Heidi Klum or The Witch of the West?
![Page 1: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/1.jpg)
From information, knowledge
Paragon Economics, Inc.
Steve R. Meyer, Ph.D. Paragon Economics, Inc.
Pig Ski Conference – February 2009
Economic Outlook: Heidi Klum or The Witch of the West?
![Page 2: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/2.jpg)
From information, knowledge
Paragon Economics, Inc.
COMPETITORS
![Page 3: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/3.jpg)
From information, knowledge
Paragon Economics, Inc.
Current market shares of broiler companies
![Page 4: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/4.jpg)
From information, knowledge
Paragon Economics, Inc.
’08 broiler slaughter: DOWN 0.7% . . . . . . On equal number of weeks! Q4: -4.7%
YTD ’09: -6%
![Page 5: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/5.jpg)
From information, knowledge
Paragon Economics, Inc.
Higher weights offset some of the reduction . . . production still grew – but only 1.2% in ‘08
![Page 6: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/6.jpg)
From information, knowledge
Paragon Economics, Inc.
But HUGE cutbacks are on the way w/ sets . . . . . . down 2.9% for ’08, 7.6% for Q4-08, 7.1% YTD
![Page 7: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/7.jpg)
From information, knowledge
Paragon Economics, Inc.
Prices ARE better this year . . . . . . but are not good enough to cover costs
![Page 8: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/8.jpg)
From information, knowledge
Paragon Economics, Inc.
Signs of longer-term reductions . . .
![Page 9: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/9.jpg)
From information, knowledge
Paragon Economics, Inc.
Dec 2008 COF was 6.2% lower than in ’07 . . . . . . and COF was yr/yr lower from July on in ‘08
![Page 10: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/10.jpg)
From information, knowledge
Paragon Economics, Inc.
Jan 1 COF was down 7.1% from Jan 2007
![Page 11: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/11.jpg)
From information, knowledge
Paragon Economics, Inc.
But the July Cattle Inventory said . . . . . . there are plenty of cattle still out there
![Page 12: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/12.jpg)
From information, knowledge
Paragon Economics, Inc.
January Cattle report due out tomorrow . . . . . . still a lot of feeder cattle vs. placements
![Page 13: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/13.jpg)
From information, knowledge
Paragon Economics, Inc.
Delayed placements due to feed costs . . . . . . mean larger cattle in and out of lots
![Page 14: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/14.jpg)
From information, knowledge
Paragon Economics, Inc.
Longer term – fewer beef cows . . . . . . Canadian cows are ~30% of this increase
![Page 15: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/15.jpg)
From information, knowledge
Paragon Economics, Inc.
FEED PRICES AND COSTS
![Page 16: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/16.jpg)
From information, knowledge
Paragon Economics, Inc.
Ethanol producers are hurting – Ohhhhhh.
“The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance AND a guaranteed market.”
Amy Myers Jaffe Energy Analyst Rice University
In the New York Times, February 12
![Page 17: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/17.jpg)
From information, knowledge
Paragon Economics, Inc.
Forget cellulosic. Will the RFS be met in ’09?
![Page 18: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/18.jpg)
From information, knowledge
Paragon Economics, Inc.
And now E-10 will cost MORE than gasoline?
![Page 19: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/19.jpg)
From information, knowledge
Paragon Economics, Inc.
But these guys are STILL DANGEROUS!
![Page 20: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/20.jpg)
From information, knowledge
Paragon Economics, Inc.
Corn and oil correlation is breaking down . . . . . Speculative? Necessary for acres?
![Page 21: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/21.jpg)
From information, knowledge
Paragon Economics, Inc.
Corn prices have likely made a bottom . . . . . . Future a function of soybeans, weather
![Page 22: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/22.jpg)
From information, knowledge
Paragon Economics, Inc.
Corn must keep up with beans . . . . . . And is not doing very well at the moment
![Page 23: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/23.jpg)
From information, knowledge
Paragon Economics, Inc.
Weekly chart: Now in ’06-’07 trading range. . . . . . But $3 to $4.50 is VERY wide, historically
![Page 24: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/24.jpg)
From information, knowledge
Paragon Economics, Inc.
SBM futures: Confirmed double bottom . . . . . . Now a function of Brazil, Arg, U.S. weather
![Page 25: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/25.jpg)
From information, knowledge
Paragon Economics, Inc.
Feed costs have risen since early December
![Page 26: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/26.jpg)
From information, knowledge
Paragon Economics, Inc.
DEMAND
![Page 27: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/27.jpg)
From information, knowledge
Paragon Economics, Inc.
Demand indexes are down for all meats . . . . . . And ALL have had a tough 3 years
![Page 28: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/28.jpg)
From information, knowledge
Paragon Economics, Inc.
An alternate demand measure: RPCE
![Page 29: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/29.jpg)
From information, knowledge
Paragon Economics, Inc.
Monthly RPCE clearly shows ’08 problem . . . . . . retail price did not make up for exports
![Page 30: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/30.jpg)
From information, knowledge
Paragon Economics, Inc.
Huge growth in pork exports -- +49.7% in ‘08 . . . Nov & Dec: up only 0.5% & 3.2% from ‘07
![Page 31: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/31.jpg)
From information, knowledge
Paragon Economics, Inc.
Exports to China are down 80% from June. . . . . . other markets are holding pretty well
![Page 32: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/32.jpg)
From information, knowledge
Paragon Economics, Inc.
Impact 1: Exports pulled up low value cuts . . . but we are back to “normal” now
![Page 33: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/33.jpg)
From information, knowledge
Paragon Economics, Inc.
Impact 2: Record high by-product values . . . but those are returning to “normal”, too
![Page 34: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/34.jpg)
From information, knowledge
Paragon Economics, Inc.
How will a stronger $US impact exports? . . . $US is still WEAK in historic terms
![Page 35: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/35.jpg)
From information, knowledge
Paragon Economics, Inc.
HOG SUPPLIES
![Page 36: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/36.jpg)
From information, knowledge
Paragon Economics, Inc.
Profits plunged again in Nov & Dec . . . . . . To -$45 & -$40, -$27.86/hd in January
![Page 37: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/37.jpg)
From information, knowledge
Paragon Economics, Inc.
2008 will be the second worst year EVER . . . . . . At $-21.78, second only to 1998
![Page 38: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/38.jpg)
From information, knowledge
Paragon Economics, Inc.
Producer wealth is now at ’97 and ’06 levels
![Page 39: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/39.jpg)
From information, knowledge
Paragon Economics, Inc.
December H&P Report: A hodge-podge
![Page 40: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/40.jpg)
From information, knowledge
Paragon Economics, Inc.
Lower hog supplies are on the way . . . . . . with significant reductions in Q2 & Q3
![Page 41: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/41.jpg)
From information, knowledge
Paragon Economics, Inc.
Fewer Canadian market hogs -- MCOOL & $C . . . down 76% year-to-date
![Page 42: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/42.jpg)
From information, knowledge
Paragon Economics, Inc.
FP imports: 6.7 mil in ’08, 5 to 5.2 mil in ’09?
![Page 43: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/43.jpg)
From information, knowledge
Paragon Economics, Inc.
MCOOL: What the (*&^)*(#@ is going on? Government rules were pretty well
understood – until the final rule and Secretary Vilsack’s muddying the waters! - Big concern: Consumers Union and Food &
Water Watch were cited in stories on “voluntary” rules
The final rule provides LOADS of flexibility – probably too much for MHs
The final rule changes came from the office of U.S. Trade Rep – avoid trade war
![Page 44: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/44.jpg)
From information, knowledge
Paragon Economics, Inc.
The ultimate judge will be the consumer Wild card: Consumer reaction to multi-
country label - Will “Canada” on label be a problem? - “Mexico”, “Uruguay”, etc. may be – beef
My expectation: Consumer will NOT dis-criminate against “U.S & Canada” label - Canadian feeders/weaners will be wanted - But will they be available?
» Shrinking Canadian herd » Renewal of Canadian feeding -- Hytek
![Page 45: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/45.jpg)
From information, knowledge
Paragon Economics, Inc.
Breeding herds are falling rapidly . . . . . . But the incentives have changed
![Page 46: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/46.jpg)
From information, knowledge
Paragon Economics, Inc.
Oct Canada-U.S. BH was smallest since 1986
![Page 47: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/47.jpg)
From information, knowledge
Paragon Economics, Inc.
Sow slaughter slowed markedly in late ‘08
![Page 48: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/48.jpg)
From information, knowledge
Paragon Economics, Inc.
Quarterly slaughter forecasts . . .
![Page 49: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/49.jpg)
From information, knowledge
Paragon Economics, Inc.
Price forecasts based on Dec H&P . . . . . . w/ futures lower re. cash forecasts
![Page 50: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/50.jpg)
From information, knowledge
Paragon Economics, Inc.
2009 prices are not “BAD” hog prices!!! . . . but they’ve fallen $5 since Jan 1
![Page 51: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/51.jpg)
From information, knowledge
Paragon Economics, Inc.
2009: Futures prices are back to breakeven
![Page 52: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/52.jpg)
From information, knowledge
Paragon Economics, Inc.
July & Aug: About 50% of seasonal rally . . . . . . comes after January – mid to upper $80s
![Page 53: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/53.jpg)
From information, knowledge
Paragon Economics, Inc.
Supply and price expectations HIGHER meat prices LED by chicken this
winter – Ethanol’s impact on food is finally here!
![Page 54: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/54.jpg)
From information, knowledge
Paragon Economics, Inc.
Retail meat prices may flatten in short run . . . . . but they still must rise to cover all costs!
![Page 55: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/55.jpg)
From information, knowledge
Paragon Economics, Inc.
Supply and price expectations HIGHER meat prices LED by chicken this
winter Hog prices – GOOD but not good enough.
Profits Q2 and Q3, losses Q1 and Q4 More breeding herd reduction – Canada’s
is slowing but will U.S. cut back more? Weights constant to growing slightly Productivity is increasing sharply -- Will
the cutbacks be enough to keep the industry profitable?
![Page 56: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/56.jpg)
From information, knowledge
Paragon Economics, Inc.
Risks Demand, both domestic and international, given
the financial crisis Exports – Declining growth rate is virtually
certain but will they actually fall? - Yes: Exchange rates – esp. Mexico - No: Output reductions by competitors (mainly EU) - Wild card: China?
Productivity growth may out-strip breeding herd/flock reductions
A new round of cost increases in ’09 -- bidding for acres? weather?
MCOOL – impacts?
![Page 57: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/57.jpg)
From information, knowledge
Paragon Economics, Inc.
CME’s Daily Livestock Report www.dailylivestockreport.com
National Hog Farmer’s North American Preview
www.nationalhogfarmer.com
![Page 58: Economic Outlook: Heidi Klum or The Witch of the West?](https://reader033.fdocuments.in/reader033/viewer/2022052600/5584714dd8b42a15768b479e/html5/thumbnails/58.jpg)
From information, knowledge
Paragon Economics, Inc.
Price forecasts based on Dec H&P . . . . . . w/ futures lower re. cash forecasts