USDA Outlook Forum

Feeder Cattle Supplies for the South Plains and Implications

February 24, 2012By Don Close

Market DirectorTexas Cattle Feeders Association

Amarillo, TX806 358 3681, don@tcfa.org

Cattle Inventory by Class and Calf Crop - United States: January 1, 2011 and 2012

2011 2012 Percent ofPrevious Year

(1,000 Head) (1,000 Head)

Cattle and Calves 92,682 90,769 98

Cows and Heifers that have calved 3,999 39,112 98Beef Cows 30,850 29,883 97Milk Cows 9,150 9,230 101

Heifers 500 Pounds and over 19,576 19,388 99For Beef Replacement 5,139 5,212 101For Milk Replacement 4,568 4,527 99Other Heifers 9,869 9,649 98

Steers 500# and over 16,397 16,072 98Bulls 500# and over 2,155 2,052 95Calves under 500# 14,555 14,145 97

Cattle on Feed 14,013 14,121 101

2,010 2,011Calf Crop 35,695 35,313 99

Regional Distribution of All Cattle and Beef Heifer Retention

Percent of Percent of Heifer

All CattleCattle on

Feed RetentionInter Mountain CO, ID, MT, UT, WY 11.00% 11.50% Up 9%

West AZ, CA, NV, OR, WA 10.00% 6.00% Up 8%

Corn Belt IL, IN, IA, KS, MN, MI, MO, NE ND, SD, WI, 33.00% 49.00% Up 6%

Upper Mid-West KY, NJ, OH, PA, VA, W VA 9.00% 0.00% Up 1%

South East AL, AR FL, GA, LA, MS, NC, SC TN 12% 0% Up 1%

TCFA NM, OK, TX 20% 28% Dn 13%

South Plains Feeder Supply (TCFA)

YoY YoY

2011 2012 % Change Number

Other Heifers 2,255 2,170 Dn 4% Dn 85,000

Strs > 500 3,865 3,580 Dn 7% Dn 285,000

Combined 6,120 5,750 Dn 6% Dn 370,000

Calves < 500 3,485 2,960 Dn 15% Dn 525,000

Total 9,605 8,710 Dn 9.5% Dn 895,000

Number of Cattle Grazing on Small Grain Pasture – 3 State Total: January 1, 2011 – 2012

2011 2013 % of Previous Year

Kansas, Oklahoma and Texas 1.60 1.59 99%

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

February

MarchAprilMayJune

JulyAugust

September

October

November

December

January

2003 2004 2005 2006 2007 2008 2009 2010 2011

-$350.00-$300.00-$250.00-$200.00-$150.00-$100.00-$50.00

$0.00$50.00

$100.00$150.00$200.00$250.00$300.00$350.00$400.00

Cattle Feeding P&L

DATE

P&L

Feeding Calves Have Added Cost

The Historical Average for the Industry is 1 Employee for Every 1,000 Cattle.

Commercial Feed Yards are Working .6 to .8 Employees Per 1,000 Head.

Grow Yards are Working 1.5 to 2 Employees Per 1,000 Head.

Jan-08

Mar-08

May-08

Jul-0

8

Sep-08

Nov-08

Jan-09

Mar-09

May-09

Jul-0

9

Sep-09

Nov-09

Jan-10

Mar-10

May-10

Jul-1

0

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-1

1

Sep-11

Nov-11

Jan-12

70.00

75.00

80.00

85.00

90.00

95.00

100.00

105.00

110.00

115.00

Cost of Gain (Steers)Dr. Marcus Hoelsher

MONTH

COST

OF

GAI

N

2.002.25

2.502.75

3.003.25

3.503.75

4.004.25

4.504.75

5.005.25

5.505.75

6.006.25

6.506.75

7.007.25

7.507.75

8.008.25

8.50

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

120.00

6 Months WEIGHTED CORN (HEREFORD) & COG STEERS

WEIGHTED CORN PRICE

COG

STE

ERS

80.0085.0090.0095.00

100.00105.00110.00115.00120.00125.00130.00135.00140.00145.00150.00155.00160.00165.00170.00175.00180.00

PRIC

E

DATE

TCFA FEEDER INDEX

5 Yr Avg

2010

2011

2012

Proj

What Will Change the Outlook?• Capital Requirements Exceeding Equity

• Another Summer of Drought• Wide Spread Seasonal Rains to Recharge

Soil and Ground Water• Economic Turmoil in Europe

• Surging Energy Prices that Curb Consumer Spending and Flatten Vacation

Season