Cattle Markets: Situation,
Outlook, and Issues
Oklahoma State University Webinar
September 9, 2014
James G. Robb
Director
28 Land Grant Universities:
USDA Members:
ERS
APHIS
GIPSA
NASS
WAOB
AMS
Associate Members:
AFBF
ASI
NCBA
NPB
CME-Group
Canadian Consortium
Noble Foundation
CoBank
TCFA
CWB
TCU
NWFCS
Topics: Price Drivers and …
• Perspective on Cattle Prices
• Beef Demand
– Domestic
– Foreign Markets
• Feedstuffs Backdrop
• A Few Comments on Poultry and Pork
• More on Cattle Markets
– U.S. Cattle Inventory
– Cost and Return Prospects
• Time to Plan is Now
USDA Data Sources – NASS, AMS, FAS, and ERS
All Forecasts – LMIC
$ Per Cwt.
170
SLAUGHTER STEER PRICES
5 Market Weighted Average, Weekly
160
150
140
130
120
110
100
90
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS
Livestock Marketing Information Center
OCT
2013
2014
$ Per Cwt.
255
MED. & LRG. #1 FEEDER STEER PRICES
700-800 Pounds, Southern Plains, Weekly
235
215
195
175
155
135
115
95
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
OCT
2013
2014
$ Per Cwt.
75
FEEDER STEER vs FED STEER PRICES
700-800 Lbs. Minus Slaughter Steer, S. Plains, Weekly
65
55
45
35
25
15
5
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
OCT
2013
2014
$ Per Cwt.
290
MED. & LRG. #1 STEER CALF PRICES
500-600 Pounds, Southern Plains, Weekly
270
250
230
210
190
170
150
130
110
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
OCT
2013
2014
$ Per Cwt.
145
SLAUGHTER COW PRICES
Southern Plains, 85-90% Lean, Weekly
135
125
115
105
95
85
75
65
55
45
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS
Livestock Marketing Information Center
2013
OCT
2014
AVERAGE ANNUAL CATTLE PRICES
Southern Plains
$ Per Cwt
275
250
225
200
175
150
125
100
75
50
1986
1988
1990
1992
1994
1996
1998
500-600lb Steer Calves
Data Source: USDA-AMS, Compiled and Analysis by LMIC
Livestock Marketing Information Center
2000
2002
2004
2006
700-800lb Feeder Steers
2008
2010
2012
Fed Steers
2014
2016
US Consumer Demand
and Consumption
(Disappearance)
Dollars
42000
PER CAPITA DISPOSABLE PERSONAL INCOME
Quarterly
40000
38000
36000
34000
32000
30000
28000
2005
2006
2007
2008
2009
Current Dollar
Data Source: Bureau of Economic Analysis
Livestock Marketing Information Center
2010
2011
2005 Dollar
2012
2013
2014
Index Value
120
100
100
RETAIL ALL FRESH BEEF DEMAND INDEX
First Quarter, Using CPI 1990=100
95 94
86 87 83 86
80
91
75 77 76
80 80 83 83
87 85 85
82 81
80 80 80
77
74
60
40
20
0
1990
1992
1994
1996
1998
2000
2002
2004
Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2006
2008
2010
2012
2014
Index Value
120
100
100
96
90
80
RETAIL ALL FRESH BEEF DEMAND INDEX
Second Quarter, Using CPI 1990=100
83 84 80
80
75 73
86 83
77 77 79
91 90
84 84
80 76
78 80
75
74
84
60
40
20
0
1990
1992
1994
1996
1998
2000
2002
2004
Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2006
2008
2010
2012
2014
RETAIL PORK DEMAND INDEX
Second Quarter, Using CPI 1990=100
Index Value
120
100
100 99
96
91 93
80
87
80 84
89
93 93
97
89
91 93 89
82 84
90
76
82
82 79 83
77
60
40
20
0
1990
1992
1994
1996
1998
2000
2002
2004
Data Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2006
2008
2010
2012
2014
International
Trade
Perspective
US BEEF AND VEAL EXPORTS
Carcass Weight, Annual
Bil. Pounds
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1991
1994
1997
2000
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2003
2006
2009
2012
2015
US BEEF EXPORTS TO MAJOR MARKETS
Carcass Weight, Monthly
Mil. Pounds
90
80
70
60
50
40
30
20
10
0
2006
2007
2008
Japan
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information Center
2009
Canada
2010
2011
Mexico
2012
South Korea
2013
2014
US BEEF AND VEAL IMPORTS
Carcass Weight, Annual
Bil. Pounds
4.0
3.5
3.0
2.5
2.0
1.5
1991
1994
1997
2000
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2003
2006
2009
2012
2015
Feedstuffs -Corn
OMAHA CORN PRICES
Weekly
$ Per Bu.
8.25
7.25
6.25
5.25
4.25
3.25
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS
Livestock Marketing Information Center
OCT
2013
2014
US TOTAL CORN SUPPLY AND PRICE
Crop Year
Bil. Bushels
16
$ Per Bushel
7.25
15
6.50
14
5.75
13
5.00
12
4.25
11
3.50
10
2.75
9
2.00
8
1.25
1990
1992
1994
1996
1998
2000
2002
Supply
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center
2004
2006
Price
2008
2010
2012
2014
US CORN DISAPPEARANCE AND STOCKS
Crop Year
Bil. Bushels
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1990
1992
1994
1996
1998
Feed & Residual
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center
2000
2002
2004
Food, Seed & Industrial
2006
2008
Exports
2010
2012
Stocks
2014
Percent
40
US RANGE AND PASTURE CONDITION
Percent Poor and Very Poor, Weekly
35
30
25
20
15
10
May
Jul
Avg. 2008-12
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Sep
2013
2014
Poultry and Pork
$ Per Cwt.
280
BOXED BEEF CUTOUT VALUE
Choice 600-900 Lbs., Carcass, Weekly
260
240
220
200
180
160
140
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS
Livestock Marketing Information Center
OCT
2013
2014
Thousands
RTC BROILER PRODUCTION
Quarterly
Bil. Pounds
10.2
10.0
9.8
9.6
9.4
9.2
9.0
8.8
8.6
JAN-MAR
APR-JUN
Avg. 2009/13
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
JUL-SEP
2014
2015
OCT-DEC
2016
Thousands
COMMERCIAL PORK PRODUCTION
Quarterly
Bil. Pounds
6.6
6.4
6.2
6
5.8
5.6
5.4
5.2
5
JAN-MAR
APR-JUN
Avg. 2009/13
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
JUL-SEP
2014
2015
OCT-DEC
2016
$ Per Cwt.
145
PORK CUTOUT VALUE
(Voluntary data prior to 2013), Weekly
135
125
115
105
95
85
75
65
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
OCT
2013
2014
Thousands
TOTAL RED MEAT & POULTRY PRODUCTION
Quarterly
Bil. Pounds
24.4
24.0
23.6
23.2
22.8
22.4
22.0
21.6
21.2
JAN-MAR
APR-JUN
Avg. 2009/13
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
JUL-SEP
2014
2015
OCT-DEC
2016
Cattle
BEEF COWS THAT CALVED
JANUARY 1, 2014
(1000 Head)
209
1476
943
11
350
516
445
694
114
600
325
170
885
1797
226
105
240
1635
293
359
700
1414
1820
192
191 657
1012
360
864
178
1805
387
882
174
477
3910
671
0 to 170
170 to 387
387 to 882
882 to 3911
480
450
4
877
69
U.S. Total:
Data Source: USDA-NASS
VT 12
NH 3
MA 6
RI 2
CT 4
NJ 8
DE 3
MD 38
29042
CHANGE IN BEEF COWS NUMBERS
JANUARY 1, 2013 TO JANUARY 2014
(1000 Head)
-12
-30
21
0
-25
-11
-65
0
1
-10
10
15
-40
-8
-5
3
-3
-15
86
1
-9
63
51
-3
-4
31
0
-9
-105
-29
-16
-48
3
20
-10
-110 to -11
-11 to -1
-1 to 3
3 to 87
-4
-1
-31
-1
Data Source: USDA-NASS
VT 0
NH -1
MA -1
RI 0
CT -2
NJ -1
DE -1
MD -3
15
-20
-53
U.S. Total:
-255
Mil. Head
7
HEIFERS HELD AS BEEF COW REPLACEMENTS
January 1, U.S.
6.5
6
+1.7 %
5.5
5
4.5
1984
1987
1990
Data Source: USDA-NASS
Livestock Marketing Information Center
1993
1996
1999
2002
2005
2008
2011
2014
HEIFER SLAUGHTER
Federally Inspected, Weekly
Thou. Head
215
205
195
185
175
165
155
145
135
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
OCT
2013
2014
BEEF COW SLAUGHTER
Federally Inspected, Weekly
Thou. Head
85
80
75
70
65
60
55
50
45
40
35
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
OCT
2013
2014
Mil. Head
140
JANUARY 1 TOTAL CATTLE INVENTORY
U.S., Annual
130
120
110
100
90
80
1954
1959
1964
1969
Data Source: USDA-NASS
Livestock Marketing Information Center
1974
1979
1984
1989
1994
1999
2004
2009
2014
Thousands
BEEF PRODUCTION vs. CATTLE INVENTORY
Inventory on January 1, U.S.
Bil. Pounds
28
Mil. Head
106
Commercial Beef Production
104
27
102
100
26
98
25
96
94
24
92
23
Total Cattle Inventory
90
88
22
1989
1991
1993
1995
1997
1999
2001
Inventory
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2003
2005
Production
2007
2009
2011
2013
Thousands
COMMERCIAL BEEF PRODUCTION
Quarterly
Bil. Pounds
6.9
6.7
6.5
6.3
6.1
5.9
5.7
5.5
5.3
JAN-MAR
APR-JUN
Avg. 2009/13
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
JUL-SEP
2014
2015
OCT-DEC
2016
CALF SLAUGHTER
Federally Inspected, Weekly
Thou. Head
21
19
17
15
13
11
9
7
JAN
APR
JUL
Avg. 2008-12
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
OCT
2013
2014
$ Per Cow
600
COW-CALF RETURNS AND CATTLE INVENTORY
U.S., Annual
Mil. Head
115
500
110
400
105
300
100
200
95
100
90
0
85
-100
80
1985
1987
1989
1991
1993
1995
1997
Cow-Calf Returns
Data Source: USDA-AMS & USDA-NASS, Compiled and Analysis by LMIC
Livestock Marketing Information Center
1999
2001
2003
2005
2007
Cattle Inventory Jan 1
2009
2011
2013
ESTIMATED AVERAGE COW CALF COSTS
Includes Pasture Rent, Annual
$ Per Cow
900
800
700
600
500
400
300
200
100
0
1985
1988
1991
Data Source: USDA-AMS, NASS, Analysis by LMIC
Livestock Marketing Information Center
1994
1997
2000
2003
2006
2009
2012
CHOICE STEER PRICE vs BREAKEVEN
Cattle Feeding, S. Plains, Monthly
$ Per Cwt
175
Latest Data: August 2014
155
135
115
95
75
2006
2007
2008
Steer Price
2009
2010
Breakeven
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
2011
2012
2013
Projected Breakeven
2014
Economic Environment: Cow/Calf Plan Now
•
•
•
•
•
•
•
•
Domestic Consumer Beef Demand Has Improved
Foreign Beef Demand Surprisingly Strong
Chicken and Pork Output Ramping-Up
Controls Already Set to Reduced Beef Output Throughout
2015
Cattle Price Peak on the Horizon: 2015, 2016, or 2017?
Mistakes Are Costly, Sound Business Practices Required
Feedstuff Costs Down But Still High – Forage is Valuable
Time To Plan is Now!
 Estimate Income
 Visit with Tax Professional
 Develop Alternatives and Evaluate Ranch ROI
Issues, Issues, Issues….
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Imports
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GE
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Rights
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Oil Price
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Exchange Rate
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