Beef Cattle Market Update

Transcription

1 Beef Cattle Market Update August 8, 2017 Dr. Scott Brown Agricultural Markets and Policy Division of Applied Social Sciences University of Missouri

2 Where Do Cattle Markets Go From Here? It has been a wild ride the last few years The pendulum has swung: too few cattle to perhaps too many Other meat supplies have followed suit We may be returning to what is a long-term normal Unfortunately this follows a sharp declines in cattle prices As unforeseen events caused recent volatility, more may occur The tug-of-war between supply and demand continues Recent demand performance and outlook is positive Abundant cattle supplies continue to exert market pressure

3 $ Per Cow ESTIMATED AVERAGE COW CALF RETURNS Returns Over Cash Cost (Includes Pasture Rent), Annual Data Source: USDA-AMS, Compiled and Analysis by LMIC Livestock Marketing Information Center C-P-66 07/07/17

4 Economies of Scale Are Present In All Agricultural Sectors

5 MED. & LRG. #1 STEER CALF PRICES Pounds, Southern Plains, Weekly 240 $ Per Cwt JAN APR JUL OCT Avg Data Source: USDA-AMS Livestock Marketing Information Center C-P-49A 08/01/17

6 Beef Cows and Production Beef Cows (Million Head) Beef Prod, t+2 (Billion Pounds)

7 Annual Change in Beef Cows,

8 Change in Beef Cows, 2017 vs

9 How Many More Beef Cows? Million Head Beef Cow Inventory (p)

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11 Weather Is Cooperating in Growing the Beef Cow Herd

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13 Beef Cows in Drought-Affected States % of Total Beef Cows Top 30 States Drought-affected here is defined as 40% or more of state in D2 or worse (YTD)

14 The Known on Beef Cow Inventory Million Head Change in Beef Cows Change in Cows (t-1) adjusted for slt.

15 July 2017 Cattle Report Actual % of 2015 All Cattle and Calves July 1 102, Annual Calf Crop Total Cows/Heifers Calved 36,300 41, Beef Cows/Heifers Milk Cows/Heifers 32,500 9, Heifers 500 lbs. + 16, For Beef Replacements For Milk Replacements Other Heifers 4,700 4,200 7, Steers 500 lbs. + Bulls 500 lbs. + Calves Under 500 lbs. Cattle on Feed 14,500 2,000 28,000 12,

16 Cattle on Feed, Capacity Lots Million Head JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC avg.

17 F.I. Dressed Cattle Weight Pounds JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC avg.

18 Meat Production and Trade, July WASDE Projected Production (billion lbs.) Beef Pork Chicken Other Exports (billion lbs.) Beef Pork Chicken Other Imports (billion lbs.) Beef Pork Other

19 Meat Availability and Prices, July WASDE Projected Availability (lbs. / capita) Beef Pork Chicken Other Prices (cents / lb.) Fed steer Barrow and gilt Chicken Turkey

20 Meat Production Billion Pounds Beef Pork Chicken (p)

21 How Does Trade Figure In? Change in Total Meat, Billion Lbs (p) Production Net Trade

22 More Meat for U.S. Consumers Still to Come Pounds per Person Domestic Meat Availability (p)

23 US Beef Trade Million Pounds Exports Imports

24 US BEEF EXPORTS TO MAJOR MARKETS Carcass Weight, Monthly Mil. Pounds Japan Canada Mexico South Korea Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center I-N-35 08/07/17

25 Global Beef Exports Million Metric Tons '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 U.S. India AU/NZ Brazil ROW

26 Beef Production Growth Percent Change vs. Previous Year U.S. Rest of World

27 Growth Potential in China! Beef Consumption, Lbs./Person U.S. Canada EU S. Korea Japan China/HK/TW

28 Feeder Steer as Share of Wholesale Value Percent

29 SLAUGHTER STEER PRICES Southern Plains, Weekly 150 $ Per Cwt JAN APR JUL OCT Avg Data Source: USDA-AMS Livestock Marketing Information Center C-P-52 08/01/17

30 $ Per Head AVERAGE ANNUAL RETURNS TO CATTLE FEEDERS Feeding 750 Lb. Steers, S. Plains, Custom Feeding Total Costs Data Source: USDA-AMS, Compiled and Analysis by LMIC Livestock Marketing Information Center C-P-10 07/05/17

31 Wholesale Value of Fed Steer/Heifer Beef Million Dollars 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2, Branded/Choice Select/Ungraded Prime (right axis)

32 Boxed Beef Choice-Select Spread Dollars per Cwt Week avg.

33 Cattle Prices Dollars per Cwt Fed Steer Feeder Steer ( lb.) (p)

34 Cattle Prices Dollars per Cwt Fed Steer Feeder Steers ( lb) (p)

35 Takeaways Lower livestock prices will last a while The markets of 2014 and early 2015 will not return There is more beef coming, and lots of pork and chicken too There is reason for optimism Consumer demand for beef, especially higher quality, is solid Export potential bright due to China, other exporter struggles Keep an eye on the developing drought in N. Plains Beef cow numbers likely to grow a couple more years What can you do on your operation to take advantage?