1 k-state research & extension cattle outlook* james mintert, ph.d. professor & extension...

K-State Research & ExtensionK-State Research & Extension

Cattle Outlook*Cattle Outlook*

James Mintert, Ph.D.James Mintert, Ph.D.Professor & Extension State Leader Professor & Extension State Leader

Department of Agricultural EconomicsDepartment of Agricultural EconomicsKansas State UniversityKansas State University

www.agmanager.info/livestock/marketingwww.agmanager.info/livestock/marketing

[email protected]@ksu.edu

* Presented at Industry Outlook Conference Chicago, IL

October 17, 2006

mailto:[email protected]


U.S. Cattle InventoryJ anuary 1, 1975-2006

50

60

70

80

90

100

110

120

130

140

75 80 85 90 95 00 05Year

Million

Head

Source: USDA & K-State Research & ExtensionKSU Dept. of Ag Econwww.agmanager.info

A Shrinking IndustryA Shrinking IndustryResponding to a Lack of Profitability Responding to a Lack of Profitability

Current inventory is about 26% Current inventory is about 26% smaller than in 1975smaller than in 1975


Rising Productivity Is Partially ResponsibleRising Productivity Is Partially Responsible

Dressed Beef Production . Per Cow Per Year .

200

250

300

350

400

450

500

550

600

650

700

50 55 60 65 70 75 80 85 90 95 00 05 10

Year

Po

un

ds

Beef Production Per Cow

30 Year Trend

Source: USDA & K-State Research & Extension .


But Weaker Demand Was Key But Weaker Demand Was Key Beef Demand 1980-1998Beef Demand 1980-1998

Annual Retail Choice Beef Demand Index

88 86 8379 76

70 6966 65 62 59 58 56 55 53 51

94

50

0

10

20

30

40

50

60

70

80

90

100

81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98Year

Ind

ex V

alu

e

Source: USDA, Dept. of Commerce & K- State Research & Extension Price Deflated By CPI, 1980 =100 for Beef Demand Index

KSU Dept. of Ag. Econ. www.agmanager.info



52 54 56 5559

63

50

0

10

20

30

40

50

60

70

80

90

100

98 99 00 01 02 03 04Year

Inde

x V

alue



Measuring Changes In Beef DemandMeasuring Changes In Beef Demand1998-20041998-2004

Demand in ’04 Was Up About 25% from 1998 Level


Measuring Changes In Beef DemandMeasuring Changes In Beef Demand1998-20051998-2005


52 54 56 5559

63 61

50

0

10

20

30

40

50

60

70

80

90

100

98 99 00 01 02 03 04 05Year

Ind

ex V

alu

e



Beef Demand During All of ’05 Decreased About 4%But Demand in ’05 Was Still Up About 21% from 1998 Level


22ndnd Quarter Demand Index Fell Quarter Demand Index Fell About 10% Below A Year AgoAbout 10% Below A Year Ago

Retail Choice Beef Demand Index April-J une Quarter

93 90 9086 85

82

74 7470 70 68

64 61 59 58 57 54 53 55 5760 60 62

67 6760

0

10

20

30

40

50

60

70

80

90

100

81 83 85 87 89 91 93 95 97 99 01 03 05Year

Ind

ex V

alu

e

Source: USDA, Dept. of Commerce & K-State Research & Extension Price Deflated By CPI, 1980 =100 for Beef Demand Index

KSU Dept. of Ag. Econ.www.agmanager.info


Beef Demand ShiftersBeef Demand ShiftersWhat’s been taking place recently?What’s been taking place recently?

• Low carb diet effect has worn offLow carb diet effect has worn off

• Consumer’s disposable income growth slowingConsumer’s disposable income growth slowing

• Expect more domestic demand weaknessExpect more domestic demand weakness

• How do we turn this around?How do we turn this around?


Increases in Beef Industry ConcentrationIncreases in Beef Industry Concentration


Cattle Feeding Concentration IncreasingCattle Feeding Concentration Increasing

19751975

7 Major Feeding States7 Major Feeding States

• 56,221 feedlots marketed 15 million cattle56,221 feedlots marketed 15 million cattle

• Average marketings/feedlot = 267 headAverage marketings/feedlot = 267 head

• Feedlots > 1,000 hd. (1,221 lots) marketed 74% of Feedlots > 1,000 hd. (1,221 lots) marketed 74% of cattlecattle

Source: USDA, Cattle On FeedSource: USDA, Cattle On Feed 7 states = AZ, CA, CO, IA, KS, 7 states = AZ, CA, CO, IA, KS, NE, TX NE, TX


Fewer But Larger Cattle FeedersFewer But Larger Cattle Feeders

19951995


• 23,472 feedlots marketed 20.2 million cattle23,472 feedlots marketed 20.2 million cattle

• Average marketings/feedlot = 858 headAverage marketings/feedlot = 858 head

• Feedlots >1000 hd. (1,584 lots) marketed 93% Feedlots >1000 hd. (1,584 lots) marketed 93% of cattleof cattle

Source: USDA, Cattle On FeedSource: USDA, Cattle On Feed 7 states = AZ, CA, CO, IA, 7 states = AZ, CA, CO, IA, KS, KS, NE, TX NE, TX


Even Fewer But Larger Cattle FeedersEven Fewer But Larger Cattle Feeders

20042004


• 14,932 feedlots marketed 20.4 million cattle14,932 feedlots marketed 20.4 million cattle

• Average marketings/feedlot = 1,369 headAverage marketings/feedlot = 1,369 head

• Feedlots >1000 hd. (1,632 lots) marketed 95% Feedlots >1000 hd. (1,632 lots) marketed 95% of cattleof cattle

Source: USDA, Cattle On FeedSource: USDA, Cattle On Feed 7 states = AZ, CA, CO, IA, 7 states = AZ, CA, CO, IA, KS, KS, NE, TX NE, TX


Largest Cattle Feeding Firms, 2005Largest Cattle Feeding Firms, 2005

RankRank FirmFirm # of Lots# of Lots 1-Time Cap. 1-Time Cap.

(head)(head)

11 5 Rivers Ranch5 Rivers Ranch 1010 811,000811,000

22 Cactus Cactus 1010 520,000520,000

33 CargillCargill 4 4 300,000300,000

44 FrionaFriona 4 4 275,000275,000

55 AzTxAzTx 4 4 232,000232,000

Source: Cattle Buyers Weekly


Which Size Category Is Gaining Market Share?Which Size Category Is Gaining Market Share?

Share of U.S. Fed Cattle Marketings By Feedyard Size Category

0%

10%

20%

30%

40%

50%

60%

79 81 83 85 87 89 91 93 95 97 99 01 03

Year

Sh

are

of

U.S

. F

ed

Ca

ttle

Ma

rke

tin

gs

32,000 Hd. & Over 16,000-31,999 Hd.8,000-15,999 Hd. 4,000-7,999 Hd.2,000-3,999 Hd. 1,000-1,999 Hd.

Source: USDA, LMIC, & K-State Research & Extension


Why Is Feedlot Concentration Increasing?Why Is Feedlot Concentration Increasing?• Lower costs for larger firmsLower costs for larger firms

• Why? Why?

• Larger firms in better position to utilizeLarger firms in better position to utilize– TechnologyTechnology– Management skillsManagement skills

• Labor managementLabor management• Financial managementFinancial management• Marketing managementMarketing management

• Implication: Small & medium size feeders Implication: Small & medium size feeders operate at a cost disadvantageoperate at a cost disadvantage


Beef Packing SectorBeef Packing SectorConcentration Increased DramaticallyConcentration Increased Dramatically

• 4-Firm Concentration Ratio (CR4) increased from 4-Firm Concentration Ratio (CR4) increased from 41% to 78% during ’80’s41% to 78% during ’80’s– Transition to large plant sizes was dramatic Transition to large plant sizes was dramatic – 19721972

• 70% of all slaughter in plants handling less than 250,000 hd/year70% of all slaughter in plants handling less than 250,000 hd/year• 35% of all slaughter in plants handling less than 100,000 hd/year35% of all slaughter in plants handling less than 100,000 hd/year

– 19921992• 70% of all slaughter in plants handling over 500,000 hd/year70% of all slaughter in plants handling over 500,000 hd/year• 4% of slaughter in plants handling less than 100,000 hd/year4% of slaughter in plants handling less than 100,000 hd/year

Source: McDonald & Ollinger, 2005


Large Packing Plants Have Lower CostsLarge Packing Plants Have Lower Costs• Eliminating wage differentials across plant sizes Eliminating wage differentials across plant sizes

provided incentive to build large packing plants provided incentive to build large packing plants

• Large plants paid higher wages in ’60’s & ’70’sLarge plants paid higher wages in ’60’s & ’70’s – 1960-19721960-1972

• Plant size 1% -wages 9% than mid-size plantPlant size 1% -wages 9% than mid-size plant

– 19821982• Plant size 1% -wages 6% than mid-size plantPlant size 1% -wages 6% than mid-size plant

– 19921992• Plant size 1% -no change in wagesPlant size 1% -no change in wages



What Motivated Shift to Large Plants in 1980’s?What Motivated Shift to Large Plants in 1980’s?

• Change in packing plant labor costs facilitated shift to Change in packing plant labor costs facilitated shift to larger plants in the Plainslarger plants in the Plains

– 1978, 45% of meat product workforce was unionized 1978, 45% of meat product workforce was unionized

– Union workers wages 29% > non-union workers Union workers wages 29% > non-union workers

– 1987, just 21% of workforce unionized1987, just 21% of workforce unionized

– In 1960’s & 1970’s, In 1960’s & 1970’s, meatpacking wages 14 to 18% > than manufacturingmeatpacking wages 14 to 18% > than manufacturing

wageswages

– 2002, meatpacking wages were 25% below manufacturing 2002, meatpacking wages were 25% below manufacturing wageswages



Have Packing Industry ChangesHave Packing Industry Changes Been Good or Bad? Been Good or Bad?

• Meat packing labor productivity increasedMeat packing labor productivity increased

– Index of output per hour rose 80% from 1970 to 1998Index of output per hour rose 80% from 1970 to 1998

• 1970 -1998, inflation adjusted spread between 1970 -1998, inflation adjusted spread between live and wholesale beef prices declined 57%live and wholesale beef prices declined 57%

• Technology & productivity improvementsTechnology & productivity improvements

– reduced farm-wholesale price spread by $0.23/cwt.reduced farm-wholesale price spread by $0.23/cwt.

– boosted live cattle prices $1.75/cwt. boosted live cattle prices $1.75/cwt.

Source: Marsh & Brester, 2001


Have Packing Industry ChangesHave Packing Industry Changes Been Good or Bad? Been Good or Bad?

Shift toward larger plant sizes reduced costs Shift toward larger plant sizes reduced costs dramaticallydramatically

Industry Weighted Average Processing Costs Industry Weighted Average Processing Costs

YearYear Per Head Cost (1992$)Per Head Cost (1992$)

19771977 $131.42$131.42

19921992 $96.58 $96.58

19971997 $90.65 $90.65

20022002 $85.09 $85.09



International Trade Outlook International Trade Outlook


Net Exports of U.S. Cattle, Beef, & By-Products1979-2005

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

79 81 83 85 87 89 91 93 95 97 99 01 03 05

Year

Bil

lio

n $

Source: U.S. Dept. of Commerce & LMIC Net Exports = Exports - Imports

U.S. Was A Net Exporter From 1981-2003U.S. Was A Net Exporter From 1981-2003


Top 5 Importers Top 5 Importers Accounted for 91% of U.S. ExportsAccounted for 91% of U.S. Exports

Top 10 Importers of U.S. BeefRanked by Value of Imports in 2003

Other Category Consists of All Other Destinations

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

Japan Mexico S. Korea Canada HongKong

Taiwan Russia China Kuwait Egypt Other

Destination

Va

lue

(T

ho

us

an

d $

)

.

.

Source: USDA-FAS .

U.S. needs to U.S. needs to recapture these recapture these markets to regain markets to regain $’s and volume$’s and volume


Annual Cattle Imports From Canada .

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

Year

Millio

n H

ea

d .

Source: USDA & LMIC, 2006 Projected

Cattle Imports from Canada Are IncreasingCattle Imports from Canada Are Increasing But Remain Well Below 2002’s Record LevelBut Remain Well Below 2002’s Record Level

Jan-July 2006 imports Jan-July 2006 imports 32% below 2002’s and 32% below 2002’s and 21% below 2001’s21% below 2001’s


Beef Imports From Canada DeclineBeef Imports From Canada Decline

Annual Beef Imports From Canada .

0.0

0.2

0.4

0.6

0.8

1.0

1.2

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Year

Billio

n P

ou

nd

s .

Source: USDA & LMIC, 2006 Projected


Result: U.S. Imports Falling Below 2005’sResult: U.S. Imports Falling Below 2005’s

Annual U.S. Beef Imports

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Year

Bil

lio

n L

bs.

Source: USDA & LMIC, 2006-2008 Forecasts


Where Are We Headed?Where Are We Headed?TradeTrade

• U.S. strength is in high quality beef productsU.S. strength is in high quality beef products

• Other countries may have comparative advantage Other countries may have comparative advantage in cow-calf productionin cow-calf production

• Exports to Pacific Rim increasing in ’07Exports to Pacific Rim increasing in ’07

• Regaining market share will take several yearsRegaining market share will take several years

– Market access is keyMarket access is key

• Consumer incomes in importing countries are key Consumer incomes in importing countries are key to long-run growth in exportsto long-run growth in exports


Export Recovery Means Net Beef Export Recovery Means Net Beef Imports in 2007 Could Be 1/2 2004’sImports in 2007 Could Be 1/2 2004’s

Annual U.S. Net Beef Imports

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Year

Bil

lio

n L

bs.

Source: USDA & LMIC, 2006-2008 Forecasts


Supply Side in the U.S. Supply Side in the U.S.


Mid-Year Inventory Was Above 2005’s, And…Mid-Year Inventory Was Above 2005’s, And…

U.S. All Cattle & Calves Inventory J uly 1 Inventory

100

105

110

115

120

125

130

135

140

145

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05Year

Mill

ion

Hea

d

Source: USDA & LMI C

J uly 1 Inventory = 105.7 Million Head 1.1% Above J uly 1, 2005 Inventory & 6.5% Below J uly 1, 1995 Inventory


Strong Profitability Encouraging Expansion, But…Strong Profitability Encouraging Expansion, But…

Estimated Kansas Cow-Calf Returns .

-100

-50

0

50

100

150

200

250

300

75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

Year

$'s

Per

Co

w

.

Source: KS State Farm Mgmt. Assoc. Returns Above Variable Costs


US RANGE AND PASTURE CONDITIONPercent Poor and Very Poor, Weekly

0

10

20

30

40

50

60

May Jul Sep

Percent

Avg.2000-04

2005

2006

Livestock Marketing Information Center

Data Source: USDA/NASS

Poor Pasture Conditions Poor Pasture Conditions Could Be Holding Back ExpansionCould Be Holding Back Expansion


U.S. Beef Cow Slaughter Up 17% vs. 2005 U.S. Beef Cow Slaughter Up 17% vs. 2005

Weekly F.I . Beef Cow Slaughter

30

35

40

45

50

55

60

65

70

75

01/07 02/25 04/15 06/03 07/22 09/09 10/28 12/16

Week Ending

Th

ou

san

d H

ead

2005 2006 5 Yr Avg

Source: USDA & K-State Research & Extension

KSU Dept. of Ag Econwww.agmanager.info


But Producers Have Been Holding Back HeifersBut Producers Have Been Holding Back Heifers

Cow & Heifer Slaughter vs. Cattle Herd Growth Rate .

70

80

90

100

110

120

130

50 55 60 65 70 75 80 85 90 95 00 05Year .

Fe

ma

le S

ltr.

% o

f S

tee

rs

.

-6%

-4%

-2%

0%

2%

4%

6%

He

rd G

row

th R

ate

.

Female % of Steer SlaughterHerd Growth Rate

Source: USDA & K-State Research & Extension2006 estimated through September 2006



Slaughter Is Expected To Rise ModestlySlaughter Is Expected To Rise Modestly

Annual U.S. Commercial Cattle Slaughter

31323334353637383940414243

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Million

Head

Source: USDA & K-State Research & Extension 2006 partially estimated, LMIC Forecast for 2007-2008

Year


Large On Feed InventoryLarge On Feed Inventory

U.S. Cattle On Feed Lots Over 1000 Head

9.50

9.75

10.00

10.25

10.50

10.75

11.00

11.25

11.50

11.75

12.00

12.25

J an Feb Mar Apr May J un J ul Aug Sep Oct Nov DecMonth

Million

Head

.

2006

2005

5 Yr. Avg.



Drought Pushing Light Weight Placements UpDrought Pushing Light Weight Placements Up

U.S. Net Placements Lots Over 1000 Head

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

J an Feb Mar Apr May J un J ul Aug Sep Oct Nov DecMonth

Million

Head

. 2006

2005

5 Yr. Avg.



Weights Will Remain HeavyWeights Will Remain Heavy

Commercial Cattle Carcass Weights .

550

575

600

625

650

675

700

725

750

775

800

70 75 80 85 90 95 00 05

Year

Dre

ssed

Wt.

/H

ead

(Lb

s.)

.

Trend

Source: USDA, LMI C, & KSU, 2007-2008 LMI C forecasts


And Beef Production Will Rise CyclicallyAnd Beef Production Will Rise Cyclically

Commercial Beef Production

20

21

22

23

24

25

26

27

28

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Year

Bill

ion

Pou

nd

s

Source: USDA & K-State Research & Extension 2006 partially estimated & LMIC forecasts for 2007-2008



Sharp Price Recovery from Summer LowsSharp Price Recovery from Summer Lows

Kansas Direct Slaughter Steers Weekly Weighted Average Live Weight Prices

70

75

80

85

90

95

100

01/06 02/17 03/31 05/12 06/23 08/04 09/15 10/27 12/08

Week Ending Date

Pri

ce (

$/c

wt.

)

200520065 Yr Avg

Source: AMS-USDA, Dodge City, KS &K-State Research & Extension



Prices Will Be Near Record High Again in ‘06Prices Will Be Near Record High Again in ‘06

Kansas Direct Slaughter Steer Prices .

60

65

70

75

80

85

90

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Year

Pri

ce

($

/cw

t.)

Source: AMS-USDA, Dodge City, KS, 2006 forecast


Futures Are Pretty Optimistic For SpringFutures Are Pretty Optimistic For Spring

Mid-Month Futures Based Price Forecasts Kansas Slaughter Steers

80

82

84

86

88

90

92

94

96

98

Oct.'06

Nov.'06

Dec.'06

J an.'07

Feb.'07

Mar.'07

Apr.'07

May'07

J un.'07

J ul.'07

Aug.'07

Sep'07

Date

Pri

ce (

$/c

wt.

)

3 Yr. Avg. Basis Most Neg. Basis Most Pos. Basis

Source: CME & K-State Research & ExtensionForecasts =10/13/06 Futures Price + Basis Estimates



Quarterly Slaughter Steer Price ProjectionsQuarterly Slaughter Steer Price Projections

Qtr.YrQtr.Yr USDA*USDA* LMICLMIC KSUKSU

Q4.06Q4.06 $86-90$86-90 $87-89$87-89 $86-89$86-89

Q1.07Q1.07 $84-90$84-90 $87-90$87-90 $88-91$88-91

Q2.07Q2.07 $84-90$84-90 $86-90$86-90 $88-91$88-91

Q3.07Q3.07 $81-87$81-87 $80-84$80-84 $82-87$82-87

**WASDEWASDE


Despite Feedlot Losses, Feeders Remain OptimisticDespite Feedlot Losses, Feeders Remain Optimistic

Monthly Iowa Yearling Finishing Steer Returns $'s Per Head

-200

-100

0

100

200

300

400

500

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005Date

$'s

/Head

Source: Iowa State University KSU Dept. of Ag Econwww.agmanager.info


But Higher Corn Prices Lead To Lower Bids for FeedersBut Higher Corn Prices Lead To Lower Bids for Feeders

Kansas Combined Auction (Dodge City, Pratt, Salina) Weekly Weighted Average 700-800 Lb. Steer Prices

85

90

95

100

105

110

115

120

125

01/06 02/17 03/31 05/12 06/23 08/04 09/15 10/27 12/08Week Ending Date

Pri

ce (

$/c

wt.

)

2005

2006

5 Yr Avg

Source: AMS-USDA, Dodge City, KS & K-State Research & Extension



Feeders In ‘05 Averaged A Record High of $112/cwt.Feeders In ‘05 Averaged A Record High of $112/cwt.Prices in ’06 Could Wind Up Near ’05’s AveragePrices in ’06 Could Wind Up Near ’05’s Average

Dodge City, KS 700-800 Lb. Steer Prices .

60

65

70

75

80

85

90

95

100

105

110

115

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Year

Pri

ce (

$/c

wt.

)

Source: AMS-USDA, Dodge City, KS & KSU, 2006 forecast


Rising Corn Prices Pushing Prices LowerRising Corn Prices Pushing Prices Lower

Kansas Combined Auction (Dodge City, Pratt, & Salina) Weekly Weighted Average 500-600 Lb. Steer Prices

95

100

105

110

115

120

125

130

135

140

145

01/06 02/17 03/31 05/12 06/23 08/04 09/15 10/27 12/08

Week Ending Date

Pri

ce (

$/c

wt.

)

2005 2006 5 Yr Avg

Source: AMS-USDA, Dodge City, KS &K-State Research & Extension



Near Record High Calf Prices Again In ‘06Near Record High Calf Prices Again In ‘06Cycle Peak in ’05 & ‘06Cycle Peak in ’05 & ‘06

Dodge City, KS 500-600 Lb. Steer Prices .

6065707580859095

100105110115120125130135

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Year

Pri

ce

($

/cw

t.)

Source: AMS-USDA, Dodge City, KS & KSU, 2006 Forecast .


Ethanol, Corn Prices, & Cattle Ethanol, Corn Prices, & Cattle


3 Largest Corn Crops On Record3 Largest Corn Crops On Record

Total U.S. Corn Production

3

4

5

6

7

8

9

10

11

12

13

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

Year

Pro

du

ctio

n (

Bill

ion

Bu

.)

.

Source: USDA WASDE Report: 10.12.06



But Corn Usage Has Been Growing RapidlyBut Corn Usage Has Been Growing Rapidly

U.S. Total Corn Usage

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05Year

Billion

Bu

.

.

Domestic Corn Usage

Trendline

Source: USDAWASDE Report: 10.12.06



Ethanol Usage Growing RapidlyEthanol Usage Growing RapidlyFood, Alcohol, & Industrial Corn Usage

% of U.S. Production

0%

5%

10%

15%

20%

25%

30%

35%

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05Year

Perc

en

t of

Pro

du

ctio

n

Source: USDA & KSUWASDE Report: 10.12.06

2006 Estimate



U.S. Will Need More Corn AcresU.S. Will Need More Corn AcresHow Do We Get Them?How Do We Get Them?

U.S. Corn Planted Acreage

60

65

70

75

80

85

90

72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06Year

Million

Acr

es

.




It Will Take Higher PricesIt Will Take Higher Prices To Push Acreage Higher To Push Acreage Higher

U.S. Average Corn Price .

$1.50

$1.70

$1.90

$2.10

$2.30

$2.50

$2.70

$2.90

$3.10

$3.30

$3.50

73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05Year

Avg

. Farm

Pri

ce (

$/B

U.)

.



Average Prices Will Be Higher and Frequency of Price Spikes Could Increase


Where Are Corn Prices Headed?Where Are Corn Prices Headed?Higher Corn Prices Spell Trouble for Livestock ProducersHigher Corn Prices Spell Trouble for Livestock Producers

Kansas Monthly Corn Prices

1.251.501.752.002.252.502.753.003.253.503.754.004.254.504.755.00

75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05

Year

Co

rn P

rice

($/

bu

.)

Source: USDA-Kansas Agricultural Statistics & K-State Research & Extension

1985-1989 Average = $2.23/bu.1990-1994 Average = $2.40/bu. 1995-1999 Average = $2.65/bu.2000-2004 Average = $2.23/bu.2004 Average=$2.59/bu.2005 Average=$2.02/bu.

Ethanol?Ethanol?


Quarterly 700-800 Lb. Steer Price ProjectionsQuarterly 700-800 Lb. Steer Price Projections

Qtr.YrQtr.Yr USDA*USDA* LMICLMIC KSUKSU

Q4.06Q4.06 $108-112$108-112 $113-115$113-115 $105-109$105-109

Q1.07Q1.07 $105-111$105-111 $110-113$110-113 $102-106$102-106

Q2.07Q2.07 $103-109$103-109 $106-110$106-110 $103-107$103-107

Q3.07Q3.07 $100-106$100-106 $108-114$108-114 $103-107$103-107

**Livestock, Dairy & Poultry OutlookLivestock, Dairy & Poultry Outlook

www.agmanager.info/livestock/marketingwww.agmanager.info/livestock/marketing

1 k-state research & extension cattle outlook* james mintert, ph.d. professor & extension...

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cattle buyers weekly

responsible slide

head feedlots

larger cattle feeders