livestock and dairy market outlook - amap€¦ · livestock and dairy market outlook august 9, 2018...
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Livestock and Dairy Market Outlook
August 9, 2018Missouri Farm Bureau Commodity Conference
Dr. Scott BrownAgricultural Markets and PolicyDivision of Applied Social [email protected]
Cattle Outlook: Can Demand Save the Day?
Since 2016: Supply pressure Economics and weather pointed to beef cow expansion Other meat supplies have followed suit
Prices resilient thus far 2017 a rare year with supplies and prices up High-quality beef is still a growth market in 2018
Changes coming? Cow herd expansion slowing or coming to an end? Domestic demand at a new level? Trade concerns?
Hog Outlook: Looks Like a Rough Ride Ahead
We know 2 major problems on supply/demand balance Production: faster growth than population 13 of 14 quarters Exports: have helped offset production growth… until now? Cold Storage: pork stocks have surpassed year ago lately
Domestic demand strength has performed well Good meat demand has moderated price pain Demand for pork products has been mixed
Feed prices may moderate cost increases
Meat Production
16
20
24
28
32
36
40
44
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019(p)
Billio
n Po
unds
Beef Pork Chicken
More Meat for U.S. Consumers Still to Come
196
200
204
208
212
216
220
224
1996 1999 2002 2005 2008 2011 2014 2017
Poun
ds p
er P
erso
n
Domestic Meat Availability
Beef Availability per U.S. Resident
-5
-4
-3
-2
-1
0
1
2
3
4
5
1991 1995 1999 2003 2007 2011 2015 2019 (p)
Perc
ent C
hang
e vs
. Yea
r Ago
1991-2016 fed steer price change: AVG MAX MIN11 years with <-1% Q change 7.0% 24.7% -10.3%9 years with -1 to 1% Q change 1.4% 7.8% - 4.2%6 years with >1% Q change -5.7% 6.6% -18.4%
Pork Availability per U.S. Resident
45
46
47
48
49
50
51
52
53
54
1986 1990 1994 1998 2002 2006 2010 2014 2018(p)
Poun
ds (r
etai
l wei
ght)
1986-2016 hog prices: AVG MAX MIN8 years with <49 lbs. 60.96 76.03 54.3011 years with 49-51 lbs. 49.09 57.75 41.2412 years with >51 lbs. 42.73 52.50 34.00
Weather Had Cooperated in Growing the Beef Cow Herd
Weather Had Cooperated in Growing the Cow Herd, But Conditions Deteriorating
0
5
10
15
20
25
30
35
May Jul Sep
Percent
US RANGE AND PASTURE CONDITIONPercent Poor and Very Poor, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
G-NP-3008/06/18
G-NP-3308/06/18
05
1015202530354045
May Jul Sep
Percent
SOUTHERN PLAINS REGION RANGE AND PASTURE CONDITION
Percent Poor and Very Poor, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
G-NP-3408/06/18
0
5
10
15
20
25
30
35
May Jul Sep
Percent
CORNBELT REGION RANGE AND PASTURE CONDITION
Percent Poor and Very Poor, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Livestock Marketing Information Center
Cumulative Missouri Feeder Cattle Sales
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1 5 9 13 17 21 25 29 33 37 41 45 49
Milli
on H
ead
2018 2017 2016 2015
C-S-3408/06/18
35
40
45
50
55
60
65
JAN APR JUL OCT
Thou. Head
BEEF COW SLAUGHTERFederally Inspected, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
Hay Prices
406080
100120140160180200220
2010 2011 2012 2013 2014 2015 2016 2017 2018
Dol
lars
per
Ton
U.S. Missouri
Beef Cow Growth Grinding to a Halt?
28
29
30
31
32
33
34
35
36
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019(p)
Milli
on H
ead
Cattle on Feed, 1000+ Capacity Lots
10.010.210.410.610.811.011.211.411.611.812.0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Milli
on H
ead
2017 2016 2011-15 avg. 2018
U.S. Hog Breeding Herd Inventory
5.6
5.7
5.8
5.9
6.0
6.1
6.2
6.3
6.4
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Milli
on H
ead
Breeding Herd Growth by State
-10 0 10 20 30 40 50 60 70 80 90
IllinoisMissouri
S. DakotaN. Carolina
TexasIowa
NebraskaOklahoma
OhioPennsylvania
Other states combined
Thousand Head, June 2018 vs. June 2014
H-S-1308/06/18
1700180019002000210022002300240025002600
JAN APR JUL OCT
Thou. Head
BARROW AND GILT SLAUGHTERFederally Inspected, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center
I-N-1608/06/18
150
170
190
210
230
250
270
290
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
US BEEF AND VEAL EXPORTSCarcass Weight, Monthly
Avg. 2012-16 2017 2018
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information Center
07/26/18
468
1012141618202224
1/10/15 7/11/15 1/9/16 7/9/16 1/7/17 7/8/17 1/6/18 7/7/18
1000 MT
TOTAL U.S. EXPORTS OF BEEF MUSCLE CUTSWeekly
Data Source: USDA-FAS
Livestock Marketing Information Center
I-N-3008/06/18
350375400425450475500525550575
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
US PORK EXPORTSCarcass Weight, Monthly
Avg. 2012-16 2017 2018
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information Center
07/26/18
5
10
15
20
25
30
35
40
45
Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Sep-17 Mar-18
1000 MT
TOTAL US EXPORTS OF PORK MUSCLE CUTSWeekly
Data Source: USDA-FAS
Livestock Marketing Information Center
Selected Retail Meat Prices
-20 0 20 40 60
Ground beefChuck roastRound roast
Beef for stewRound steakSirloin steak
Bacon, slicedPork chops
Ham, boneless
Chicken legs, bone-inChicken breast, boneless
Percent Change, 2017 vs. 2010
Jan-Jun 2018 vs. 2017:
-3.5%-4.1%
+4.7%-3.0%-1.7%
+4.5%-1.2%N/A
-0.6%-1.2%+2.8%
C-P-49A08/06/18
140150160170180190200210220230240
JAN APR JUL OCT
$ Per Cwt.
MED. & LRG. #1 STEER CALF PRICES400-500 Pounds, Southern Plains, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-AMS
Livestock Marketing Information Center
08/06/18
90
100
110
120
130
140
150
JAN APR JUL OCT
$ Per Cwt.
SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly
Avg. 2012-16 2017 2018
Data Source: USDA-AMS
Livestock Marketing Information Center
Cattle Prices
6080
100120140160180200220240260
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018(p)
2020(p)
Dol
lars
per
Cw
t.
Fed Steer Feeder Steers (500-550 lb)
Hog Price (Quarterly)
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017 2018 2019 (p)
Dol
lars
per
Cw
t
Quarterly U.S. All Milk Prices
101214161820222426
1997 2001 2005 2009 2013 2017
$ pe
r cw
t
USDA July Forecast
What’s Wrong With This Picture?
8.94
9.00
9.06
9.12
9.18
9.24
9.30
9.36
9.42
10
12
14
16
18
20
22
24
26
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Dol
lars
per
Cw
t. / M
illion
Hea
d
All Milk Price Dairy Cows (right axis)
MPP Margin
0
2
4
6
8
10
12
14
16
18
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Dol
lars
per
hun
dred
wei
ght
Global Dairy Product Prices
0.0
0.5
1.0
1.5
2.0
2.5
3.0
7 Jan2014
1 Jul2014
6 Jan2015
1 Jul2015
Jan-16 Jul-16 Jan-17 Jul-17 Dec-17 Jun-18
Dol
lars
per
Pou
nd
Butter Cheese SMP
Know What to Look For Moving Forward
Average profitability will struggle through 2019 Heavy supplies weigh on prices and limit any rallies The market will struggle to assess tariff impacts Feed prices will move on weather and tariff news
Locking in positive profits will be difficult Domestic demand could offset a lot of other negatives
Economic projections still bright The majority of our meat and dairy is consumed in this country
Trade Assistance Package International market development Direct payments – hogs, dairy Domestic market purchases
Questions
Dr. Scott BrownUniversity of Missouri222 Mumford HallColumbia, MO 65211
(573) 882 – 3861
@MUScottBrown
Weekly Livestock Update, Brownfield Ag Newshttps:/brownfieldagnews.com/brownfield-livestock-market-updates/