Photo courtesy of Judy Jacobson, Watford City. Cattle Situation and Outlook Ag Lenders Conference

Transcription

1 Photo courtesy of Judy Jacobson, Watford City Cattle Situation and Outlook Ag Lenders Conference Tim Petry Livestock Economist Oct. 31, 2016 AGL16-Outlook

2 TO ALL AG LENDER ATTENDEES

3

4 What Happened?

5 WASDE U.S. Meat Production and Prices Change from forecast Change from forecast Change from 2016 Production Billion Pounds Percent Pounds Percent Pounds Percent Beef Pork Broilers Turkey Total meat Prices Dollars/cwt Dollars/cwt Steers Hogs Cents/lb Cents/lb Broilers Turkey Oct. 12, 2016

6 Mountains of Meat M-S-11 10/21/16 P-S-03 10/21/16

7

8 Thou. Head 90 BEEF COW SLAUGHTER Federally Inspected, Weekly JAN APR JUL OCT Avg Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center C-S-34 10/21/16

9 C-N-38 02/01/16 HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, ND Livestock Marketing Information Center; Data Source: USDA/NASS

10

11 How much expansion is needed? 60 Cow Inventory and Beef Production Million Head Billion Pounds Source: USDA compiled by LMIC Cow Inventory Beef Production

12 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT Avg Fut 2016 Fut 2017

13 LV CAT DEC LN HOG -$23-19% -$27-40%

14 Retail Beef Price / Fed Steer Price Cents Per Pound % % % % Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Retail Beef Price Fed Steer Price Data Source: USDA-ERS, LMIC

15 I-N-16 10/06/16 I-N-50 10/06/16 Data Source: USDA-ERS & USDA-FAS, Livestock Marketing Information Center

16 U.S. Ranking in World Production Exports Beef 1 4 Pork 2 1 Chicken 1 2 Turkey 1 1 Eggs 2 2

17 Pounds 950 STEER DRESSED WEIGHT Federally Inspected, Weekly JAN APR JUL OCT Avg Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center C-S-18 10/21/16

18 Competing Meats H-P-09 10/24/16 P-P-01 10/24/16 Data Source: USDA-AMS Livestock Marketing Information Center S-P-05 10/24/16

19 MED. FRAME #1 STEER CALF PRICES Pounds, N.D., Weekly JAN APR JUL OCT Ave

20 MED. & LRG. #1 FEEDER STEER PRICES Pounds, N.D., Weekly JAN APR JUL OCT 2017 Futures 2016 Futures Ave

21 Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Calves Calves Calves Calves Calves Calves SF_LS796 Sioux Falls, SD Fri Oct 28, 2016 USDA-ND Dept of Ag Market News North Dakota Weekly Auction Summary - For the week ending Oct 29, 2016 Receipts: 11,568 Last Week: 9,652 Year Ago: 12,595 Results of: Kist, Napoleon, and Stockmen's

22 SF_LS796 Sioux Falls, SD Fri Oct 28, 2016 USDA-ND Dept of Ag Market News North Dakota Weekly Auction Summary - For the week ending Oct 29, 2016 Receipts: 11,568 Last Week: 9,652 Year Ago: 12,595 Results of: Kist, Napoleon, and Stockmen's Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Fancy Calves Calves Calves Fleshy

23 Backgrounding

24 Projected Calf Backgrounding Profit 550 lb. to 750 lb. $2.80 corn, $65 hay Calf Purchase Price ($/cwt) Sales Price Jan FC Fut $120 Mar FC Fut $118 Current CME Cash Index $124

25 $ Per Cwt SLAUGHTER COW PRICES 85-90% Lean, Weekly JAN APR JUL OCT Avg Livestock Marketing Information Center Data Source: USDA-AMS C-P-35

26 $ Per Cwt AVERAGE ANNUAL CATTLE PRICES lb Steer Calves lb Feeder Steers Fed Steers Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center C-P-06 09/27/16

27 Average Net Return to Labor and Management Per Beef Cow N.D. Farm Business Mgmt., Excluding Red River Valley Average Projected High 20% Low 20%

28 Price Risk Management Tools Cash forward contract Video and internet auctions CME futures CME options Livestock Risk Protection (LRP) Livestock Gross Margin (LGM) Which one or combination fits your marketing plan?

29 Year Coverage Price Fall Steer Calf LRP Results July 15 to Nov 15 (17 wk) Premium Actual Price LRP Payment LRP Profit ?

30 SF_LS766 Sioux Falls, SD Thu Nov 12, 2015 USDA-ND Dept of Ag Market News Stockmans Livestock Exchange Feeder Cattle Weighted Average Report for 11/12/2015 Receipts: 4101 Last Week: 4762 Year Ago: 4553 Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Calves Calves Calves

31 CME Cattle Contract Changes 1. Feeder Cattle (eff Nov 16) - prior: lb. Med & Lrg #1 & 2 Steers - new: $ 3 - affects basis and LRP 2. Reduced hours: 8:30 a.m. 1:05 p.m. CT 3. Live Cattle Grades (eff Oct 17) - prior: 55% choice, 45% select - new: 60% choice, 40% select 4. Delay listing subsequent contracts - cash settlement?? 5. Worthing, SD delivery disc Oct delivery only

32

33 Volatile Prices Will Continue! Questions!