![Page 1: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/1.jpg)
Cattle and Beef Outlook
Randy Blach, CattleFax
![Page 2: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/2.jpg)
Soybean Oil and LC Cattle impacted most
![Page 3: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/3.jpg)
3
Reduced longs 60,000 in 5 weeks
![Page 4: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/4.jpg)
4
Live Cattle Strip-Weekly
Live Cattle Futures plummeted to major support at $104-$105 .
2016 2017 2018 2019
![Page 5: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/5.jpg)
5
Record production with 35 mil. fewer cattle.
![Page 6: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/6.jpg)
6
The peak is in Beef Cows is in at 31.7 mil. for now!
![Page 7: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/7.jpg)
7
![Page 8: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/8.jpg)
8
![Page 9: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/9.jpg)
9
40 hour week
Can’t afford any more disruptions
![Page 10: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/10.jpg)
10
![Page 11: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/11.jpg)
11
91 bil.
103 bil.
113 bil.2020 ProductionPoultry up 1.7 bil. 3.5%Pork up 1.1 bil. lbs. 4%Beef up 600 mil lbs. 2%
![Page 12: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/12.jpg)
12
2020 ForecastBeef +5%Pork +15%-30%Broilers +7-8%
![Page 13: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/13.jpg)
13
![Page 14: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/14.jpg)
14
Red- PorkBlue-Beef
Japan and S Korea are two of the most important export destinations for U.S. protein.Must control the coronavirus soon or exports will likely be disappointing.
![Page 15: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/15.jpg)
15
Significant opportunities forU.S. beef exports to China.
![Page 16: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/16.jpg)
16
![Page 17: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/17.jpg)
17
![Page 18: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/18.jpg)
18
![Page 19: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/19.jpg)
19
Brazil is a part of this “Other” category. The last three years the quota has been filled; Brazil will have to take market share from other suppliers. In 2020 the TRQ is 65,005 MT.Canada, Mexico have no limit while Australia, New Zealand, Uruguay, Argentina have quotas.
![Page 20: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/20.jpg)
What Lies Ahead?
![Page 21: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/21.jpg)
Grade and CAB 2005 2019 Change % ChangeChoice and Prime 55.7% 79.6% 23.9% 43%
Upper 2/3 CH. and PR. 16.6% 31.1% 14.5% 87%
Cab Acceptance Rate 15.6% 35.1% 19.5% 125%
Million HeadCH. and PR. 14.81 20.67 5.86 40%
Upper 2/3 CH and PR 4.41 8.07 3.66 83%Source: USDA, CattleFax
2005-2019 15 Years of Progress
![Page 22: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/22.jpg)
The three major protein segments have grow spending $114 bil. in 20 years.
Beef: +$58 bil., +110%
Pork: +$29 bil., +77%
Poultry: +$28 bil., +71%
![Page 23: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/23.jpg)
23
Beef has the most exposure at food service if domestic demand declines sharply because of the coronavirus.
![Page 24: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/24.jpg)
24
-9 pts. -13 pts.-6 pts.
There are three other periods of “unexpected” demand erosion in the 2000s. The September 11 terrorist attacks, the Great Recession, and the West Coast Port Strike/Competing Protein Surge.
In each instance, there was an unexpected period of demand destruction.
![Page 25: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/25.jpg)
25
May/June Cutout Demand MatrixCutout DemandChange vs Year Prior
Supply Δ Per Cap -20% -15% -10% -5% 2%-1% 9.7 $182 $193 $205 $216 $2310% 9.8 $180 $191 $202 $213 $2281% 9.9 $177 $188 $199 $210 $2252% 10.0 $175 $186 $197 $207 $2223% 10.1 $172 $183 $194 $205 $2194% 10.2 $170 $180 $191 $202 $2165% 10.3 $167 $178 $188 $199 $213
Assuming the beef averages $197 for May and June and assuming leverage is 48% with a 2-3% increase in supply.
Futures priced demand down 10% compared to a year ago.
Futures pricing poor demand
![Page 26: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/26.jpg)
26
Jan 2017 to Present
This range not expected to change in 2020
![Page 27: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/27.jpg)
27
![Page 28: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/28.jpg)
Executive Summary Weather Pattern shifting from El Nino to La Nina
Drought would be the Risk for Cattle Herd Reduction.
Record Production for Beef, Pork and Poultry: Export Growth Must Continue.
Need More Packing Capacity (beef and pork) Labor still a major issue.
Consumer Attitudes have been Excellent; Will Consumer Behavior Change?
Strong Domestic Demand: could Coronavirus be the Next Black Swan?
The Price Swings and Volatility is here to stay.
![Page 29: Cattle and Beef Outlook - meatconference.commeatconference.com/sites/default/files/books/2020/Blach_FINAL.pdf · 25 May/June Cutout Demand Matrix Cutout DemandChange vs Year Prior](https://reader033.vdocuments.mx/reader033/viewer/2022043019/5f3b85d81c92ad61d413454d/html5/thumbnails/29.jpg)
The most severe recessions the U.S. has experienced since the depression are 2008-2009 and 1981-1982.
Per capita meat supplies may be higher than previously forecast if exports are disappointing.
ASF is still a major factor that the global protein markets will have to navigate.
China businesses are mostly open 91.7%, but the last 8 weeks the PMI in China was worsethan the global meltdown in 2008-2009.
Critical how Japan and S. Korea can handle the major outbreak of virus- they are two of thebiggest export markets for U.S. products.
Is a Recession knocking on Door? or just a needed Correction in Markets! Futures have already priced a slowdown. Don’t bet thy whole wad!
Executive Summary