Cattle Situation and Outlook

Transcription

1 Photo courtesy of Judy Jacobson, Watford City Cattle Situation and Outlook Tim Petry Livestock Economist September 2, 2015 Washburn Livestock Outlook pptx

2 TO ALL LIVESTOCK IN-SERVICE ATTENDEES

3 Record Breaking Prices! 2014 A Year to Remember

4 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%

5 What Happened? SEP FDR CAT

6 AUG LV CAT DEC CORN

7 WHAT IS HAPPENING? 2015 Record pork production Record weights, breeding up 2.1%, WASDE Record chicken production Beef, pork, chicken exports struggling High $US value West Coast dock workers Bird flu Russia & world unrest Byproducts East Coast weather Fewer acres of corn? Continued short cattle supply, but increasing Lower gas prices

8 WASDE U.S. Meat Production and Prices forecast Change from forecast Change from 2015 Production Billion Pounds Percent Pounds Percent Beef Pork Broilers Turkey Total meat Prices Dollars/cwt Dollars/cwt Steers Hogs Cents/lb Cents/lb Broilers Turkey Aug. 12, 2015

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

10 Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center

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12 U.S. Drought Monitor August 5, 2014 August 6, 2013 August 7, 2012 August 2, 2011

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14 Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center

15 Livestock Marketing Information Center; Data Source: USDA/NASS C-N-37 07/28/15

16 HEIFERS HELD AS BEEF COW REPLACEMENTS January 1, ND Thousand Head

17 Steer Carcass Weights C-S-18 08/28/15

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

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 2016 Futures 2015 Futures Ave

21 SF_LS766 Sioux Falls, SD Thu Aug 27, 2015 USDA-ND Dept Ag Market News Stockmens Livestock Exchange - Dickinson, ND Feeder Cattle Weighted Average Report for 08/27/2015 Receipts: 1116 Last Week: Not Reported Year Ago: Not Reported Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Full Full Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price Full Full Fancy

22 $ Per Cwt SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly JAN APR JUL OCT Avg Fut Fut 2016

23 LM_CT153 St. Joseph, MO Mon Aug 31, 2015 USDA Market News NATIONAL WEEKLY DIRECT SLAUGHTER CATTLE - PRIOR WEEK SLAUGHTER AND CONTRACT PURCHASES For Week Ending Sunday, 08/30/2015 D: BASIS DISTRIBUTION Delivery Mo./Basis Mo. Sep '15/Oct 81 head = head = ,046 head = ,415 head = Oct '15/Oct 70 head = head = head = head = ,538 head = ,763 head = Nov '15/Dec 75 head = head = ,410 head = head = ,500 head = ,046 head = ,921 head = Dec '15/Dec 800 head = head = ,500 head = head = Jan '16/Feb 36 head = head = head = ,440 head = +2.00

24 Livestock Marketing Information Center Data Source: USDA-AMS

25 AVERAGE ANNUAL CATTLE PRICES $ Per Cwt lb Steer Calves lb Feeder Steers Fed Steers Data Source: USDA-AMS, Compiled and Analysis by LMIC Livestock Marketing Information Center C-P-06 12/19/14

26 Cattle Cycle Marketing Strategies P - Sell high priced heifers - Retain calves longer (background, summer graze, feed to slaughter weight, replacement heifers) - Pre-price a floor price to protect from catastrophic price decline and leave top side price potential open P - Sell more cows, keep or buy low priced heifers - Evaluate retention programs closely - Active pre-pricing plan

27 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?

28 Competing Meats H-P-09 08/31/15 Data Source: USDA-AMS Livestock Marketing Information Center

29 S-P-06 08/31/15 Data Source: USDA-AMS Livestock Marketing Information Center S-P-05 08/31/15

30 07/27/15 Data Source: USDA-AMS Livestock Marketing Information Center 07/27/15

31 Volatile Prices Will Continue! Questions!