dr. derrell peel - opportunity and risk with record cattle prices
Post on 15-Jul-2015
77 Views
Preview:
TRANSCRIPT
Opportunity and Risk with Record Cattle Prices
Derrell S. Peel
Breedlove Professor of Agribusiness and
Extension Livestock Marketing Specialist
Oklahoma State University
2014 IOWA BEEF INDUSTRY CONVENTION
FED, FEEDER AND CALF PRICES,
Iowa Auctions and 5 Mkt Fed,
Weekly
80
100
120
140
160
180
200
220
240
260
280
300
2009 2010 2011 2012 2013 2014
$ Per Cwt.
Fed 7-800 lb. Steers 5-600 lb.Steers
Major Beef Market Factors
• Cattle Inventory and Beef Production
• Beef Demand
• International Trade
• Feed and Input Markets
• Forage Conditions
C-P-06
10/28/14
50
75
100
125
150
175
200
225
250
275
300
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
$ Per Cwt
AVERAGE ANNUAL CATTLE PRICESSouthern Plains
500-600lb Steer Calves 700-800lb Feeder Steers Fed Steers
Data Source: USDA-AMS, Compiled and Analysis by LMIC
Livestock Marketing Information Center
C-P-62
10/27/14
140
160
180
200
220
240
260
280
JAN APR JUL OCT
$ Per Cwt.
BOXED BEEF CUTOUT VALUEChoice 600-900 Lbs., Carcass, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
WHOLESALE BEEF PRICE
Choice, Monthly
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Per Cwt
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
C-P-35
11/24/14
45
55
65
75
85
95
105
115
125
135
145
JAN APR JUL OCT
$ Per Cwt.
SLAUGHTER COW PRICESSouthern Plains, 85-90% Lean, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
CATTLE INVENTORIES
C-N-01
07/28/14
80
90
100
110
120
130
140
1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014
Mil. Head
JANUARY 1 TOTAL CATTLE INVENTORYU.S., Annual
-1.8 Percent
2014 = 87.7 Million Head
Data Source: USDA-NASS
Livestock Marketing Information Center
U.S. Beef Cow Inventory1920-2014
0
5
10
15
20
25
30
35
40
45
50
19
20
19
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
Mill
ion
He
ad
TOTAL BEEF COW INVENTORY BY CYCLEU.S., January 1
28
29
30
31
32
33
34
35
36
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Mil. Head
1990-04
2004-14
C-N-40
01/31/14Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC
JANUARY 1 BEEF COW INVENTORY
Iowa, Annual
600650700750
800850900950
10001050
110011501200
1990 1993 1996 1999 2002 2005 2008 2011 2014
1000 Head
Livestock Marketing Information Center
Data Source: USDA-NASS
C-N-30
07/28/14
20
25
30
35
40
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
Mil. Head
JANUARY 1 FEEDER CATTLE SUPPLIESResidual, Outside Feedlots, U.S.
Data Source: USDA-NASS
Livestock Marketing Information Center
C-N-38
07/28/14
4.5
5
5.5
6
6.5
7
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
Mil. Head
HEIFERS HELD AS BEEF COW REPLACEMENTSJanuary 1, U.S.
+1.7 %
Data Source: USDA-NASS
Livestock Marketing Information Center
HEIFERS ON FEEDQuarterly
3200330034003500360037003800390040004100420043004400450046004700
JAN-MAR APR-JUN JUL-SEP OCT-DEC
1000 Head
Avg.
2006/10
2011
2012
2013
2014
M-S-01
08/28/13Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC
C-S-12
11/20/14
625
675
725
775
825
875
JAN MAR MAY JUL SEP NOV
Thou. Head
HEIFER SLAUGHTERFederally Inspected, Monthly
Avg. 2008-12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
C-S-20
11/20/14
170
190
210
230
250
270
290
310
330
350
JAN MAR MAY JUL SEP NOV
Thou. Head
BEEF COW SLAUGHTERFederally Inspected, Monthly
Avg. 2008-12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
HEIFER RETENTION AND COW CULLING
as % of January 1 Cow Herd
14%
15%
16%
17%
18%
19%
20%
1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Heifer %
7%
8%
9%
10%
11%
12%
13%
Culling %
Analysis by Derrell Peel
Data Source: USDA-NASS
Average:Heifer % = 17.1Culling % = 9.7
Cows
Heifers
JANUARY 1 BEEF COW INVENTORYU.S., Annual
28
30
32
34
36
38
40
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Mil. Head
Analysis by Derrell Peel
Data Source: USDA-NASS22 Sep 2014
U.S. Ave., -11.0 %
Change in Beef Cow Inventory, January 1, 2007-2014
-21.1%
-7.0%
+6.8%
-5.9%-5.3%
-3.4%-5.7%
-12.0%-1.75, 2011
-15.9%+6.1, 2011
-5.5%
-25.1%-3.7%, 2011
-13.6%
-7.7%
-16.2%
+0.3%
+2.0%
-7.4%
-23.1%
-2.3%-17.9%
-4.2%
-12.4%-5.0%
-11.0%
-13.6%
-8.2%
-9.4%
-2.3
%
-14.3%
-8.2%
+2.4%
+5.6%
+13.3%
-2.9%
-7.5%
U.S. Ave., -3.6 %
Percent Change in Pasture Acreage,
2007-2012
-13.1%
-1.6%
-3.0%
-1.1%+0.2%
+2.6%-7.2%
-4.4%+0.2%
-2.4%
-1.4%
-11.5%
+5.8%
-18.9%
-5.7%
-4.9%
-3.8%
-9.9%
-9.7%-23.5%
-1.4%
-21.2%-5.6%
+0.30%
-31.0%
-8.7%
-15.9%
-19
.0%
-20.8%
-9.6%
-14.8%
-23.6%
-16.6%
-15.1%
-2.6%
IOWA ALL HAY ACREAGE
Harvested Acres
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Thousand
G-NP-19
01/11/13Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
U S ALL HAY ACREAGE
Harvested Acres
54000
56000
58000
60000
62000
64000
66000
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Thousand
G-NP-19
01/11/13Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
C-N-10
11/21/14
9.5
10
10.5
11
11.5
12
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Head
CATTLE ON FEEDUS Total, Monthly
Avg. 2008/12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
G-NP-03
10/10/14
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
$ Per Bushel
NATIONAL AVERAGE CORN PRICECrop Year, Received by Farmers
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center
C-P-21
11/20/14
75
100
125
150
175
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$ Per Cwt
CHOICE STEER PRICE vs BREAKEVENCattle Feeding, S. Plains, Monthly
Steer Price Breakeven Projected Breakeven
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Latest Data: October 2014
C-P-22
11/20/14
-325
-275
-225
-175
-125
-75
-25
25
75
125
175
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Per 1000 lbs
AVERAGE RETURNS TO CATTLE FEEDERSFeeding 725 Lb. Steers. S. Plains, Monthly
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Latest Data: October 2014
Share of Cattle on FeedIowa and Nebraska, 12 Month Moving Ave.
21.0%
23.0%
25.0%
27.0%
29.0%
31.0%
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Share of Cattle on FeedTexas and Oklahoma, 12 Month Moving Ave.
21.0%
23.0%
25.0%
27.0%
29.0%
31.0%
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Texas Triangle and Omaha Corn
Prices
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
2011 2012 2013 2014
$ Per Bushel
Omaha
Texas
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
C-S-09
10/23/14
2200
2300
2400
2500
2600
2700
2800
2900
3000
3100
JAN MAR MAY JUL SEP NOV
Thou. Head
COMMERCIAL CATTLE SLAUGHTERMonthly
Avg. 2008-12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
C-S-16
11/20/14
1050
1150
1250
1350
1450
1550
1650
JAN MAR MAY JUL SEP NOV
Thou. Head
STEER SLAUGHTERFederally Inspected, Monthly
Avg. 2008-12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
C-S-18A
11/29/14
760
770
780
790
800
810
820
830
840
JAN APR JUL OCT
Pounds
CATTLE DRESSED WEIGHTFederally Inspected, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
C-S-18
11/29/14
810
820
830
840
850
860
870
880
890
900
910
JAN APR JUL OCT
Pounds
STEER DRESSED WEIGHTFederally Inspected, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
Steer Dressed WeightsMonthly, Federally Inspected
760
780
800
820
840
860
880
900
920
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Po
un
ds
Steer Carcass Weight
Federally Inspected
600
625
650
675
700
725
750
775
800
825
850
875
900
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Pounds
M-S-02
10/23/14
1700
1800
1900
2000
2100
2200
2300
2400
JAN MAR MAY JUL SEP NOV
Mil. Pounds
COMMERCIAL BEEF PRODUCTIONMonthly
Avg. 2008-12 2013 2014
Data Source: USDA-NASS
Livestock Marketing Information Center
BEEF PRODUCTION
vs. BEEF COW INVENTORYInventory on January 1, U.S.
28
29
30
31
32
33
34
35
36
37
1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Mil. Head
22
23
24
25
26
27
28
Bil. Pounds
Commercial Beef Production
Beef Cow Inventory
M-S-23
08/10/12Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
2014/2015 Meat Production and Consumption
Production ConsumptionPer Capita
ConsumptionChange
2013 2014 2015 2014-2015
2015 2014-2015
Million lbs.
Millionlbs.
Millionlbs.
% Retail Lbs. %
Beef 25829 24501 24155 -1.4 53.4 -1.7
Pork 23206 22920 23475 +2.4 46.3 +0.4
Broilers 37425 38049 39577 +4.0 84.7 +2.0
M-P-11
11/21/14
400
450
500
550
600
650
JAN MAR MAY JUL SEP NOV
Cents Per Pound
RETAIL BEEF PRICEAll Fresh, Monthly
Avg. 2008-12 2013 2014
Data Source: Bureau of Labor Statistics & USDA-ERS
Livestock Marketing Information Center
RETAIL BEEF PRICEMonthly
350
375
400
425
450
475
500
525
550
575
600
625
650
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Per Cwt
All Fresh
Choice
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
M-P-21
12/01/14
450
500
550
600
650
700
750
800
850
900
950
JAN APR JUL OCT
Cents Per Cwt.
WHOLESALE BEEF RIBEYE PRICESBoneless, Light, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
M-P-23
12/01/14
700
800
900
1000
1100
1200
1300
1400
JAN APR JUL OCT
$ Per Cwt.
WHOLESALE BEEF FULL TENDER PRICESMusl-On, 5 Pounds and Up, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
140
160
180
200
220
240
260
280
300
320
340
JAN APR JUL OCT
$ Per Cwt.
WHOLESALE BEEF CHUCK PRICESBoneless 2 Piece, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center12/01/14
M-P-22
12/01/14
140
160
180
200
220
240
260
280
300
320
JAN APR JUL OCT
$ Per Cwt.
WHOLESALE BEEF BOTTOM ROUND PRICES18-33 Pounds, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
M-P-24
12/01/14
140
160
180
200
220
240
260
280
300
320
JAN APR JUL OCT
$ Per Cwt.
WHOLESALE BONELESS BEEF PRICESFresh, 90% Lean, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
M-P-25
12/01/14
50
70
90
110
130
150
170
JAN APR JUL OCT
$ Per Cwt.
WHOLESALE BONELESS BEEF PRICESFresh, 50% Lean, Weekly
Avg. 2008-12 2013 2014
Data Source: USDA-AMS
Livestock Marketing Information Center
INTERNATIONAL TRADE
I-N-16
11/05/14
150
170
190
210
230
250
270
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
US BEEF AND VEAL EXPORTSCarcass Weight, Monthly
Avg. 2008-12 2013 2014
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information Center
I-N-06
08/29/14
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1991 1994 1997 2000 2003 2006 2009 2012 2015
Bil. Pounds
US BEEF AND VEAL EXPORTSCarcass Weight, Annual
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
I-N-15
11/05/14
145
165
185
205
225
245
265
285
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
US BEEF AND VEAL IMPORTSCarcass Weight, Monthly
Avg. 2008-12 2013 2014
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information Center
I-N-12
08/29/14
1.5
2.0
2.5
3.0
3.5
4.0
1991 1994 1997 2000 2003 2006 2009 2012 2015
Bil. Pounds
US BEEF AND VEAL IMPORTSCarcass Weight, Annual
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
I-N-13
07/16/14
0
500
1000
1500
2000
1988 1991 1994 1997 2000 2003 2006 2009 2012
Thou. Head
CATTLE IMPORTS FROM CANADA AND MEXICO
Annual
Mexico Canada
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Price-Weight RelationshipMedium/Large No. 1 Steers, December 8, 2014
200215230245260275290305320335350365
375
425
475
525
575
625
675
725
775
825
875
925
weight (pounds)
Pri
ce
($
/cw
t) Iowa
Okla
Price-Weight RelationshipMedium/Large No. 1 Steers, September 12, 2014
200215230245260275290305320335350365
375
425
475
525
575
625
675
725
775
825
875
925
weight (pounds)
Pri
ce
($
/cw
t) Iowa
Okla
Steer Price, Total Value and Value of Gain December 8, 2014, Iowa Combined
Weight (lbs)
Average Price ($/cwt.)
Total Value ($/hd)
VOG400 lb. Beg. Weight($/lb.)
VOG450 lb. Beg. Weight($/lb
VOG500 lb. Beg. Weight($/lb.)
VOG550 lb. Beg. Weight($/lb.)
VOG600 lb. Beg. Weight($/lb.)
VOG650 lb. Beg. Weight($/lb.)
400 $340.48 $1,362
450 $322.47 $1,451 $1.78
500 $311.48 $1,557 $1.95 $2.13
550 $292.35 $1,608 $1.64 $1.57 $1.01
600 $275.63 $1,654 $1.46 $1.35 $0.96 $0.92
650 $262.91 $1,709 $1.39 $1.29 $1.01 $1.01 $1.10
700 $252.52 $1,768 $1.35 $1.27 $1.05 $1.06 $1.14 $1.17
750 $246.47 $1,849 $1.39 $1.32 $1.16 $1.20 $1.30 $1.40
800 $236.98 $1,896 $1.33 $1.27 $1.13 $1.15 $1.21 $1.25
850 $230.15 $1,956 $1.32 $1.26 $1.14 $1.16 $1.21 $1.24
900 $227.27 $2,045 $1.37 $1.32 $1.22 $1.25 $1.31 $1.35
C-P-66
09/10/14
-100
0
100
200
300
400
500
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
$ Per Cow
ESTIMATED AVERAGE COW CALF RETURNSReturns Over Cash Cost (Includes Pasture Rent), Annual
Data Source: USDA-AMS, Compiled and Analysis by LMIC
Livestock Marketing Information Center
2015 Market Situation
• Strong prices for cattle and beef
• Record cow-calf returns
• Value of gain for stocker production
• Market versus production risk
• Margin squeeze for feedlots and packers
• Beef demand challenges
• Continued herd rebuilding– If no drought
The Weekly Email NewsletterFrom OSU Animal Science and Agricultural
Economics
• Send Email to derrell.peel@okstate.edu
top related