Livestock and 28 US Land Grant Universities: AMS …Jim Robb, LMIC 11/28/17 2017 Range Beef Cow...
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Jim Robb, LMIC 11/28/17 2017 Range Beef Cow Symposium, Cheyenne, Wyo. 1 Livestock and Feedgrain Outlook 2017 Range Beef Cow Symposium November 28-30, 2017 James G. Robb Director, LMIC Website: www.lmic.info 7 USDA Agencies: AMS (Market News), APIS, ERS, GIPSA (Packers & Stock.), NASS, FAS, and WAOB 12 Associate Members: AFBF ASI NCBA NPB CME-Group Canadian Consortium Noble Research Institute CoBank TCFA TCU NWFCS DLR 28 US Land Grant Universities: USDA Data Sources -- NASS, AMS, FAS, and ERS Forecasts By -- LMIC Topics: Outlook and Economic Drivers …. • Cattle Prices and LMIC’s Forecasts Through 2019 • Corn Price Outlook • Total U.S. Red Meat and Poultry Production • Dimensions of Demand and The Marketing Chain • Beef International Trade • Cattle -- Cyclical Aspects and Returns • Marketing, Managing, and Financing • Some Really Long Term Stuff 90 100 110 120 130 140 150 JAN APR JUL OCT $ Per Cwt. SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly Avg. 2011-15 2016 2017 Data Source: USDA-AMS 120 130 140 150 160 170 180 190 200 210 220 JAN APR JUL OCT $ Per Cwt. MED. & LRG. #1 STEER CALF PRICES 500-600 Pounds, Southern Plains, Weekly Avg. 2011-15 2016 2017 Data Source: USDA-AMS 50 60 70 80 90 100 JAN APR JUL OCT $ Per Cwt. SLAUGHTER COW PRICES Southern Plains, 85-90% Lean, Weekly Avg. 2011-15 2016 2017 Data Source: USDA-AMS
Transcript of Livestock and 28 US Land Grant Universities: AMS …Jim Robb, LMIC 11/28/17 2017 Range Beef Cow...
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 1
Livestock and Feedgrain Outlook
2017 Range Beef Cow Symposium
November 28-30, 2017
James G. Robb Director, LMIC
Website: www.lmic.info
7 USDA Agencies: AMS (Market News), APIS, ERS, GIPSA (Packers & Stock.), NASS, FAS, and WAOB
12 Associate Members: AFBF ASI NCBA NPB CME-Group Canadian Consortium Noble Research Institute CoBank TCFA TCU NWFCS DLR
28 US Land Grant Universities:
USDA Data Sources -- NASS, AMS, FAS, and ERS Forecasts By -- LMIC
Topics: Outlook and Economic Drivers ….
• Cattle Prices and LMIC’s Forecasts Through 2019 • Corn Price Outlook • Total U.S. Red Meat and Poultry Production • Dimensions of Demand and The Marketing Chain • Beef International Trade • Cattle -- Cyclical Aspects and Returns • Marketing, Managing, and Financing • Some Really Long Term Stuff
90
100
110
120
130
140
150
JAN APR JUL OCT
$PerCwt.
SLAUGHTER STEER PRICES 5MarketWeightedAverage,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS
120
130
140
150
160
170
180
190
200
210
220
JAN APR JUL OCT
$PerCwt.
MED. & LRG. #1 STEER CALF PRICES 500-600Pounds,SouthernPlains,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS
50
60
70
80
90
100
JAN APR JUL OCT
$PerCwt.
SLAUGHTER COW PRICES SouthernPlains,85-90%Lean,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 2
820
840
860
880
900
920
940
JAN APR JUL OCT
Pounds
STEER DRESSED WEIGHT FederallyInspected,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS & USDA-NASS
50
75
100
125
150
175
200
225
250
275
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
$PerCwt
AVERAGE ANNUAL CATTLE PRICES SouthernPlains
500-600lbSteerCalves 700-800lbFeederSteers FedSteers
Data Source: USDA-AMS, Compiled and Forecasts by LMIC
75
100
125
150
175
200
225
250
275
300
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$PerCwt
AVERAGE CALF PRICES 500-600lbSteerCalves,SouthernPlains
AnnualAverage 4thQuarter
Data Source: USDA-AMS, Compiled and Forecasts by LMIC
Year S. PlainsQuarter 5-600#
($/Cwt)
2016I 195.73
II 173.86 III 157.12 IV 138.44
Year 166.29 2017
I 157.38 II 170.49
III 165.47 IV b 166-168
Year 164-1662018
I c 161-165II 161-166
III 154-160IV 147-154
Year 155-1612019
I 150-158II 151-160
III 148-158IV 143-154
Year 149-157
Domestic Consumer Demand and ....
50
60
70
80
90
100
110
120
1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Index
Domestic U.S. Consumer Confidence Monthly,Indexyear1966=100
Data Source: Thomson Reuters/University of Michigan
50
55
60
65
70
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Pounds
US BEEF CONSUMPTION PerCapita,RetailWeight,Annual
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 3
1009991898684
75737577
8282838592
878383
7874757678
7986
938889
0
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
IndexValue
RETAIL ALL FRESH BEEF DEMAND INDEX ThirdQuarter,UsingCPI1990=100
Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
40
90
140
190
240
290
340
390
440
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
$Per1000lbs
LIVE TO CUTOUT BEEF PRICE SPREAD Monthly
Avg.2011-15 2016 2017
Data Source: USDA-AMS & USDA-ERS, Compiled & Analysis by LMIC
900
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$Per1000lbs
CUTOUT TO RETAIL BEEF PRICE SPREAD Monthly
Avg.2011-15 2016 2017
Data Source: USDA-AMS & USDA-ERS, Compiled & Analysis by LMIC
Pork, Chicken, Etc.
5.0
5.5
6.0
6.5
7.0
7.5
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil.Pounds
Thou
sand
s
COMMERCIAL PORK PRODUCTION US, Quarterly
Avg.2012/16 2017 2018 2019
Data Source: USDA-NASS, Forecasts by LMIC
350
375
400
425
450
475
500
525
550
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil.Pounds
US PORK EXPORTS CarcassWeight,Monthly
Avg.2011-15 2016 2017
Data Source: USDA-ERS & USDA-FAS
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 4
8.5
9.0
9.5
10.0
10.5
11.0
11.5
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil.Pounds
Thou
sand
s
RTC BROILER PRODUCTION US, Quarterly
Avg.2012/16 2017 2018 2019
Data Source: USDA-NASS, Forecasts by LMIC
450
470
490
510
530
550
570
590
610
630
650
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil.Pounds
US BROILER EXPORTS RTCWeight,Monthly
Avg.2011-15 2016 2017
Data Source: USDA-ERS & USDA-FAS
21.522.022.523.023.524.024.525.025.526.026.527.027.5
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil.Pounds
Thou
sand
s
TOTAL RED MEAT & POULTRY PRODUCTION US, Quarterly
Avg.2012/16 2017 2018 2019
Data Source: USDA-NASS, Forecasts by LMIC
2018 Annual Per Person Dis. 218.7 Lb. Retail. Largest Since 2007
41/57 = 72% since1960
Beef Exports and Imports
150
175
200
225
250
275
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil.Pounds
US BEEF AND VEAL EXPORTS CarcassWeight,Monthly
Avg.2011-15 2016 2017
Data Source: USDA-ERS & USDA-FAS
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1994 1997 2000 2003 2006 2009 2012 2015 2018
Bil.Pounds
US BEEF AND VEAL EXPORTS CarcassWeight,Annual
Data Source: USDA-ERS & USDA-FAS
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 5
1.5
2.0
2.5
3.0
3.5
4.0
1994 1997 2000 2003 2006 2009 2012 2015 2018
Bil.Pounds
US BEEF AND VEAL IMPORTS CarcassWeight,Annual
Data Source: USDA-ERS & USDA-FAS
Feedgrains -- Corn
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Bil.Bushels
US CORN DISAPPEARANCE AND STOCKS CropYear
Feed&Residual Food,Seed&Industrial Exports Stocks
Data Source: USDA-NASS and ERS, Forecasts by LMIC
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
4
6
8
10
12
14
16
18
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
$PerBushelBil.Bushels
US TOTAL CORN SUPPLY AND PRICE CropYear
Supply Price
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
90
100
110
120
130
140
150
160
170
180
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Bu.PerAcre
NATIONAL AVERAGE CORN YIELD CropYear
Data Source: USDA-NASS, Forecasts by LMIC 155 Bu Per Acre $4.70/Bu
Cattle
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 6
60
70
80
90
100
110
120
130
140
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Mil.Head
TOTAL CATTLE INVENTORY BY CYCLE U.S.,January1
1938-49 1949-58 1958-67 1967-791979-90 1990-04 2004-14 2014-17
Data Source: USDA-NASS
33
34
35
36
37
38
39
40
41
1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Mil.Head
CALF CROP JulyEs`mates,U.S.,Annual
Data Source: USDA-NASS
+3.5 Percent2017 = 36.3 Million Head
30
35
40
45
50
55
60
65
70
JAN APR JUL OCT
Thou.Head
BEEF COW SLAUGHTER FederallyInspected,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS & USDA-NASS
100
110
120
130
140
150
160
170
180
190
200
JAN APR JUL OCT
Thou.Head
HEIFER SLAUGHTER FederallyInspected,Weekly
Avg.2011-15 2016 2017
Data Source: USDA-AMS & USDA-NASS
80
90
100
110
120
130
140
1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
Mil.Head
JANUARY 1 TOTAL CATTLE INVENTORY U.S.,Annual
Data Source: USDA-NASS; Forecasts by LMIC
5.5
5.7
5.9
6.1
6.3
6.5
6.7
6.9
7.1
7.3
7.5
JAN-MAR APR-JUN JUL-SEP OCT-DEC
Bil.Pounds
Thou
sand
s
COMMERCIAL BEEF PRODUCTION US, Quarterly
Avg.2012/16 2017 2018 2019
Data Source: USDA-NASS, Forecasts by LMIC
2018 Annual Per Person Dis. 57.8 Lb. Retail. Largest Since 2010
2017 = 26.2 Billion 2018 = 27.3 Billion 2019 = 27.9 Billion
Jim Robb, LMIC 11/28/17
2017 Range Beef Cow Symposium, Cheyenne, Wyo. 7
-100
0
100
200
300
400
500
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
$PerCow
ESTIMATED AVERAGE COW CALF RETURNS ReturnsOverCashCost(IncludesPastureRent),Annual
Data Source: USDA & LMIC, Compiled by LMIC
75
100
125
150
175
200
2010 2011 2012 2013 2014 2015 2016 2017 2018
$PerCwt.
CHOICE STEER PRICE vs BREAKEVEN CadleFeeding,S.Plains,Monthly
SteerPrice Breakeven ProjectedBreakeven
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Latest Data: October 2017
Economic Environment and Managing .…
• Cattle Feeding – One of Best Years Ever in 2014, to Worst in 2015, to Great First 8 Months of 2017
• Cyclically Lower Annual Average Cattle Prices throughout 2018
• Marketing Calves Against Larger Supplies • Sequential Decision-Making • Annual Marketing Plan Tied To Monthly Cash Flow Statement • What If ?????
100150200250300350400450500550600650
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
CentsPerPound
RETAIL PRICE COMPARISON Monthly
Pork CompositeBroiler AllFreshBeef
Data Source: Bureau of Labor Statistics & USDA-ERS
Product Markets In Transition: Segmentation
Subdivision Separation Breakdown Differentiation
Thank You! www.lmic.info
